Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business > Unit 1 (not on paper 3) > Flashcards

Unit 1 (not on paper 3) Flashcards

1
Q

what benefits do businesses bring?

A
  • create employment
  • create income
  • create new products
  • enhance a country’s reputation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

GDP

A

measures the value of a country’s total output of goods + services over a period of time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Mission statement

A

sets out a business’s overall purpose to direct + stimulate the entire organisation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Aims

A

long term plans of the business from which its corporate objectives are derived

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Objectives

A

medium to long term targets established to co-ordinate the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

examples of business objectives

A
  • profit maximisation
  • growth
  • survival
  • cash flow
  • ethical
  • diversification
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

reasons for setting objectives

A
  • managers ensure everyone is working towards the same target
  • workers more motivated as they know what business wants them to achieve
  • the success of business’s plans can be reviewed
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

profit =

A

total revenue - total costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

stakeholders

A

individuals or groups who an interest in a business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

revenues

A

earnings generated by a business as a result of its trading activities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

fixed costs

A

costs that do not change with output

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

variable costs

A

alter directly with output

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

total costs =

A

fixed costs + variable costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

average costs

A

total costs / level of production or output

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

what does the businesses profits depend on?

A

profit margin and quantity of sales

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

sole trader

A

a business that is owned + managed by one person but may employ other people

+ easy to start up
+ decisions can be made quickly
+ sole traders often have direct contact with market

  • sources of finance are limited
  • long hours with limited holidays = stress
  • unlimited liability
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

shareholder

A

an investor in and one of the owners of a company

18
Q

limited liability

A

in the event of financial difficulties, the personal belongings of shareholders are safe
owners aren’t personally responsible for debts
public + private limited companies can only lose money invested into the business

19
Q

dividends

A

part of a company’s profits that are paid to shareholders in proportion to the no. of shares that they down

20
Q

why may a business decide to remain private?

A
  • retain control over company
  • taking decisions in the company’s long term interests
  • enjoy the profits generated by the company
21
Q

benefits of trading as a public limited company?

A
  • access to capital
  • publicity
  • ability to take over companies
22
Q

takeover

A

when one company acquires control of another by buying 50% of its share capital

23
Q

mutual businesses

A

run for the benefit of their members whether employees, customers, suppliers or local community

24
Q

what different types of co-operatives exist?

A
  • consumer co-operatives (customers are members)
  • worker co-operatives (owned + operated by employees)
  • producer co-operatives (group of businesses work together to benefit from factors eg increased bargaining power)
25
Q

reason for buying shares

A
  • may benefit from increase in share price = capital gain
  • receiving dividends
  • longer term returns eg investors
  • want to be involved
  • believe in objectives
26
Q

risk of buying shares

A
  • price can fall

- companies may make lower profits than expected

27
Q

influence on share prices

A
  • company’s performance eg strategic decisions, quality of team
  • business environment
  • current share price
  • interest rates
  • industry development - potential for takeover
28
Q

benefits of rising share price

A

if demand for a share > supply = rise in share price

  • reflects well on management team
  • easier to raise capital when share prices rising -> more potential shareholders
29
Q

negatives of falling share prices

A
  • may reflect poor performance on management team
  • may make company vulnerable
  • may make difficult to raise capital
30
Q

how does rising interest rates impact costs + demand

A
  • costs of servicing existing loans may increase
  • costs of imported products may fall
  • demand for products may fall
31
Q

how does falling interest rates impact costs + demand

A
  • cost of servicing existing loas may decrease
  • costs of imported products may rise
  • demand for products may rise
32
Q

private limited company

A

people in the business own all the shares, small family business

33
Q

public limited company

A

can sell shares to the public, directors are elected to the board by shareholders

34
Q

unlimited liability

A

sole traders, business debts become personal debts -> huge financial risks

35
Q

public sector

A

owned + controlled by the govt
aim to provide services to the public rather than make a profit eg NHS, police force
funded through taxes
less accountable to shareholders -> likely to be less efficient, govt are there to bail them out -> Royal Mail so inefficient went private
some companies are needed to be owned by the govt eg hospitals

36
Q

private sector

A

owned + run by private individuals, sole traders to huge organisations eg John Lewis and Asda, most aim to make a profit but non profit organisations are also private
likely to be more efficient as don’t have govt backing and have pressure from shareholders

37
Q

what does the govt do if demand in economy is too low?

A
  • cut taxes so people have more to spend
  • central banks decrease interest rates
  • there is increased disposable income
38
Q

how are a businesses costs effected when unemployment is high?

A

means good supply of labour, businesses can hire staff easily, won’t have to pay high wages = costs low

39
Q

what does govt legislation force. business to do?

A

deal with issues eg pollution -> may increase costs if use sustainable resources but can help in LT eg Carbon trust have increased competitiveness through changes they made

40
Q

what does fair-trade do for a business?

A

increases cost but gives USP eg Co-op

41
Q

market capitalisation

A

value of the business represented by the share price x no. of shares issues

42
Q

profit warning

A

when a company expects to get lower profits than anticipated

Business (14 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions