Unit 1 Flashcards
(34 cards)
1
Q
Percentage Change
A
Percentage Change = ((New Number - Old Number) / Old Number) x 100
2
Q
Profit
A
Profit (or loss) = Total Revenue - Total Costs
3
Q
Total Revenue
A
Total Revenue = Sales x Price of Product
4
Q
Total Costs
A
Total Costs = Fixed Costs + Variable Costs
5
Q
Variable Costs
A
Variable Costs = Variable Cost per Unit x Units produced
6
Q
Average Unit Cost
A
Average Unit Cost = Total Costs / Units Sold (or Produced)
7
Q
Sole Trader Pros
A
- Simple set-up
- No legal requirement to publish accounts
- Do not distribute profits
8
Q
Sole Trader Cons
A
- Unlimited liability
- Fewer sources of finance
9
Q
Partnership Pros
A
- Shared workload
- More finance
10
Q
Partnership Cons
A
- Shared profits
- Unlimited liability
- Shared control
11
Q
Private Limited Companies Pros
A
- Limited liability
- Additional sources of finance
- Control of who shareholders are
12
Q
Private Limited Companies Cons
A
- Legal requirement to publish accounts
- More admin
- No stock exchange finance
- Shared profits
13
Q
Public Limited Companies Pros
A
- Stock exchange finance
- Stable ownership structure
- More prestige
14
Q
Public Limited Companies Cons
A
- Anyone can buy shares
- Risk of split between ownership and control
- Legal requirement to publish accounts
- Short-sighted shareholders
15
Q
Not-for-profit Pros
A
- Do not pay tax
16
Q
Not-for-profit Cons
A
- Unpredictable income
17
Q
Business plans Pros
A
- Help business understand its finances
18
Q
Business plans Cons
A
- Only a plan
19
Q
Franchising Pros
A
- Additional revenue stream
- Lower risk
20
Q
Franchising Cons
A
- Give up control
21
Q
Outsourcing Pros
A
- Higher quality
22
Q
Outsourcing Cons
A
- Give up control
23
Q
New stores Pros
A
- Lower risk
24
Q
New stores Cons
A
- New costs
25
E-commerce Pros
- Open 24/7
- Increased reach
26
E-commerce Cons
- Higher initial costs
27
Merger/Takeover Pros
- Horizontal-less competition / economies of scale
- Guaranteed outlet / deny rivals (forwards)
- Guaranteed supplies (backwards)
28
Merger/Takeover Cons
- Demotivating for employees
- Unproductive workers
- Diseconomies of scale
29
Business Aims & Objectives Pros
- Act as measure of success
- Useful to stakeholders such as shareholders
30
Business Location Factors
- Raw materials
- Employment
- Competition
- Infrastructure
- Proximity
- Finance (costs)
31
Types of Economies of Scale
- Purchasing
- Technical
32
Types of Diseconomies of Scale
- Employee Co-ordination
- Employee Motivation
- Employee Communication
33
Methods of Internal Expansion
- Franchising
- Outsourcing
- New stores
- E-Commerce
34
Methods of External Expansion
- Mergers
- Takeovers
