3.1 What is a Business Flashcards
(12 cards)
What is Profit?
The financial gain earned by a business after deducting total costs.
What is Cash Flow?
The movement of money in and out of a business, reflecting its liquidity and ability to meet financial obligations.
What is a Mission?
The fundamental reason for the existence of an organisation, defining its core values and guiding principles.
What is an Objective?
Specific, measurable goals set by a business from its primary operations, typically from sales of goods or services.
What is a Sole Trader?
An individual business owner who operates and manages a business on their own, assuming full responsibility.
What is a Private Limited Company?
A business entity with limited liability, typically owned by a small group of shareholders, and restricted from offering shares to the general public.
What is a Public Limited Company?
A corporation whose shares are traded on a public stock exchange, allowing a wide range of investors to buy and sell ownership stakes in the company.
What is a Social Enterprise?
A business entity that operates with a primary focus on addressing social or environmental issues.
What is Ordinary Share Capital?
The equity raised by a company through the issuance of ordinary share to shareholders.
What is Market Capitalisation?
The total value of a company’s outstanding shares in the stock market, calculated by multiplying the current share price by the number of shares.
What is Dividends?
Payments made by a company to its shareholders as a distribution of profits, usually in the form of cash or additional shares.
What is Equity?
What does it mean if Equity is Raised?
Equity represents ownership in a company, meaning investors or employees who own equity have a stake in the business’s assets and profits.
Raising equity in a business means a company sells ownership (shares) in itself to investors in exchange for cash. This allows the company to raise capital for growth or other purposes. Investors gain a portion of the business’s profits and assets in return for their investment.
