Business Unit 2

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Retained Profits

Profits that the owners have decided to plough back into the business after they've paid themselves a dividend.

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Businesses will need to take a loan or mortgage, this can be repaid with intrest.

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Its much easier for a large firm to get a mortgage or loan. Banks are more willing to lend them money as there's less risk of them failing. Also have more assets.

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What does a profit and loss-account show?

This shows the revenues received by the business and its costs involved in generating that revenue.

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Why might a balance sheet be referred to ask a 'Sn

Because it gives a snapshot of what the business owns, or is owned, at a particulr point in time.

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What does a balance sheet show?

A balance sheet shows how the business is being funded and how those funds are being used. Or the list of assets owned by the business and the list of liabilities. (What is owes to other organisations).

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What are the differences between tangible and inta

Tangible= Land, office, equipment, machinery, buildings and other items. The value of tangible assets is shown as their resale of theirb depreciated value. Intangible= Trademarks, long-term investments, parents, goodwill and even website domain names.

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3 ways in which a business can grown?

- Making higher prof8its. - Opening new markets at home or abroad. - Growth in business market share.

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Explain 2 reasons why a business will grow?

- A business will grow too survive. - A business will want to reduce the risk of failure.

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Economy is not growing.

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Slow down?

Starts to slow before recession.

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Sell a different type of product.

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Any costs you have.

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