Role of business Flashcards
(17 cards)
What is a business
- An organisation that attempts to satisfy the needs and wants of the community by providing goods and services.
- The aim of any business is to make a profit.
What is a good?
Physical products that are sold that are tangible, objectively quantified e.g. a gilgamesh figure
What is a service?
Services are intangible, they are subjectively valued. e.g. a haircut
What is Value adding?
An IPO diagram(input - process - output)
This process or “transformation” is adding value to the good service e.g. baking a cake
What are the 6 roles of business?
- production of goods and services
- profit
- employment and incomes
- choice and innovation
- entrepreneurship and risk
- wealth and quality of life
What is profit and how is it calculated?
The amount of money left when the expenses are subtracted from income, within a defines period of time.
Revenue - expenses = profit
What is Revenue/income?
Amount of money generated through sales
What are expenses?
How much it costs to produce the goods/services and bring them to the market
What is employment?
Refers to the state of being employed or having a job, wherein an individual is engaged in work or services for an employer in exchange for compensation.
What is income?
The money or financial gain received by an individual or a business during a specific period, often measured in the form of wages, salaries, profits, interest, rents, or other forms of earnings.
What is wage?
A specific form of compensation paid to an employee on an hourly, daily, or piece-rate basis, typically associated with jobs that involve manual or hourly work
What is a salary?
A fixed regular payment or compensation paid to an employee on a monthly, semi-monthly, or annual basis, regardless of the actual number of hours worked.
What is a shareholder?
Individuals or entities that own shares or stocks in a company. By holding shares, they become partial owners and are entitled to a portion of the company’s profits, as well as certain voting rights in major corporate decisions.
What is a dividend?
A distribution of profits by a corporation to its shareholders. It is typically paid out in the form of cash, additional shares, or other assets. Dividends are a way for shareholders to receive a return on their investment in the company.
What is an entrepreneur?
A person who sets up a business or businesses, taking on financial risks in the hope of profit.
What is quality of life?
Refers to the material standard of living and the level of choice that arises from a person’s wealth and income
What is wealth?
Refers to the amount that a person owns
