What are the possible objectives of a business?
Profit, Growth, Survival, Cash flow, Social and ethical
What should the measurement of profit include?
Revenue, turnover, sales, fixed costs, variable costs, total costs
What is the relationship between mission and objective?
A mission statement explains the company's purpose and focus, while objectives outline a path for achieving the mission
Why do businesses set objectives?
Focus and Direction, Performance Measurement, Motivation, Risk Management, Aligning resources for organisation
What are the different forms of businesses?
sole traders, LTDs and PLCs, private sector and public sector organisations, non-profit organisations, social enterprises
What are the public and private sectors?
Public : operated, owned and controlled by government agencies
Private : owned, controlled and managed by individuals and entrepreneurs
What are non-profit organisations?
An entity that operates for things other than profit for its shareholders/owners
What are social enterprises?
A business that aims to achieve social objectives whilst also generating profit, often prioritising people and the planet
What could a non-profit organisation's aim be?
Serve the public, address social issues, promote a particular cause
Which form of business is the only one to have unlimited liability?
Sole traders
What is market capitalisation (market cap) and what is it used for?
The total value of a companies outstanding shares of stock and is used to classify companies by size
What is ordinary share capital and what does it do?
The sum of money raised by a corporation from the issuances of its common shares, it represents the equity of ownership and entitles shareholders to voting and share of the profit through dividends
What is the role of shareholders?
Provide capital and influence decisions
Why do shareholders invest?
Potential for capital appreciation, dividends, ownership stake, liquidity, diversification, passive income and hedging inflation
What influences share price?
Inflation, Supply and Demand, fiscal policy, natural disaster, market sentiment, monetary policy, exchange rate and consumer spending
why are share price changes significant?
They reflect the market's perception of a company's performance and the economy's health.
How does ownership affect mission and objectives?
It can influence the choice of business form, decision making, performance and risks taken
What factors are includes in the external environment that affect costs and demand?
Competition, market conditions, incomes, interest rates, demographic factors, environment issues and fair trade