unit 1 business

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define objective
a goal a business wishes to achieve
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two types of objective
functional corporate
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define functional objective
objectives in specific sections of a business
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define corporate objective
goals for the entire business
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what is SMART
specific, measurable, achievable, realistic, time bound targets
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what is a cost
charge to a business of making a product or providing a service
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two types of cost
fixed variable
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define fixed costs
costs that do not change with the output of the business
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define variable cost
costs that change when output changes
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4 examples of fixed costs
rent advertisement salaries legal fees
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4 examples of variable costs
wages raw materials distribution costs commision
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define semi-variable costs
costs that can fit into both categories
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how is revenue calculated
price * quantity
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how does a business increase revenue
increase price increase quantity of sales
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define sole trader
a business only owned by 1 person
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3 pros of being a sole trader
can make all decisions keep all profits flexible hours
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3 cons of being a sole trader
pay more taxes unlimited liability keep own records on expenses
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two types of limited companies
public limited (plc) private limited (ltd)
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define a plc
shares can be sold to anybody and everybody
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define ltd
shares can only be sold to friends family and aquatints
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aspects of a ltd
limited shares (50) owner of most shares has control limited liability
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aspects of a plc
usually big companies lots of invested capital limited liability anybody can by shares most shares has control (50+%)
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define shareholder
owners of shares in limited companies
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what is ordinary share capital?
money a company makes the first time it sells shares
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how to work out ordinary share capital
no. shares * price of 1 share
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3 reasons to buy shares
to make money control a business to make money buy selling shares
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what are dividends
money owed to share holders from the business' profits
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where are shares first sold
initial public offering (IPO)
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why do share prices change
state of economy proposed takeovers expectations for the business
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why do business want high share prices?
reflects good performance makes it harder to be taken over easier to borrow money
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what is market capitalization?
calculated value of a plc
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how is market capitalization calculated?
current share price * number of shares issued
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what is the value for a large cap company?
4bn+
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what is the value for a medium cap company
between 500m and 4bn
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what is private sector?
any business run by private individuals (sole trader and limited companies)
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what is public sector
businesses owned and operated by the government
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3 examples of public sector
education health care defence
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what is privatization
when a public sector becomes privately owned
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why privatize
government makes money no political agenda improved efficiency increased competition
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why not privatize
price will rise may remove non profitable services
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what is nationalization?
when government take a private sector business and make it public sector
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why nationalize
ensure essential services are provided not profit based protects struggling industries
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examples of non-profit organizations
volunteer groups community groups trusts co-operatives mutual services charaties trade unions
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what is demand
customers desire to purchase a good or service at a given time, if they have the ability to pay
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what is PESTLE
political economical social technological legal environmental
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Other cards in this set

Card 2

Front

two types of objective

Back

functional corporate

Card 3

Front

define functional objective

Back

Preview of the front of card 3

Card 4

Front

define corporate objective

Back

Preview of the front of card 4

Card 5

Front

what is SMART

Back

Preview of the front of card 5
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