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Business CH 1
Ch 1 notes and summary
| Question | Answer |
|---|---|
| What is a vision statement? | A statement that outlines the aspirations and values of the business |
| What is a mission statement? | A mission statement outlines the purpose of a business, or its reason for existing. |
| What does SMART stand for? | Specific/ Measurable / Achievable/ Realistic/ Timely |
| What is a sole trader? | a person who is the exclusive owner of a business, entitled to keep all profits after tax has been paid but liable for all losses. |
| What is unlimited liability? | it is where full liability of owner (if their business fails) to the extent of their personal assets |
| What are some advantages and disadvantages of a sole trader | Advantages: Simple and inexpensive to establish / owner has total control over business Disadvantages: unlimited liability for owner / harder for owner to get finance for the business |
| What is a partnership? | a legal form of business ownership where two or more people (partners) work together. |
| What is a partnership agreement? | A formal document which outlines the duties and responsibilities of the parties to a partnership |
| What is Perpetuity? | Having ongoing life, that is, never ending |
| What are some advantages and disadvantages of a partnership? | Advantages: Risk is shared between partners / workload may be shared Disadvantages: Unlimited liability / business could be threatened by one partner leaving |
| What is limited liability? | Shareholders are only personally liable to the level of their original investment in the company |
| What is a private limited company? | A private limited company can normally be identified as the name contains ‘proprietary limited’ (or Pty Ltd). It will also have between two and 50 shareholders, who can only trade shares with the permission of other shareholders |
| What are some advantages and disadvantages of a Private limited company? | Advantages: Limited liability / separate legal entity disadvantages: Higher degree of complexity in establishing / higher establishment costs |
| What is a Public company? | A company might become publicly listed if it wants to expand its operations. A publicly listed company does not have a limit on the number of shareholders, and is listed on the Australian Securities Exchange (ASX). |
| What is a prospectus? | It is an invitation to the public and potential investors to purchase shares in a particular company |
| What are some advantages and disadvantages of a Public company | Advantages: Limited liability / Able to gain extra capital through selling extra shares Disadvantages: Highly complex structure / Additional compliance costs |
| What is a social enterprise? | A private sector business that distributes profit to benefit the community rather than individual shareholders |
| What is a government business enterprise (GBE) | It is a business that is government owned and operated. GBEs seek to run profitability by controlling costs and selling goods and services at a price that covers costs. |
| What is an objective? | A statements of desired achievements which provide direction for the business |
| What is a financial objective? | An objective that relates to the desired financial performance of the business, for example, profit and market share. |
| What are some Business objectives | Make a profit / Increase market share / fulfill a market and social need / Meet shareholder expectations |
| What is profit? | The difference between revenue and expenses. |
| What is market share? | It is the proportion or percentage of the market (and total sales) controlled by the business. |
| What is a social objective? | it relates to the role of a business in the community |
| What is a shareholder? | They re an owner of a company |
| What is a stakeholder? | An individual or a group that has a direct or vested interest in the activities of a business |
| What is efficiency? | It is the best use for resources in the production of goods and/or services. The outcome can be judged on both the quality of the goods or services produce. |
| What are the areas of management responsibility? | Operations / Finance / Human Resources / Sales and marketing / Technology support |
| What is operations? | It is the the business function responsible for manageable the process of creating goods and services. |
| What is the finance? | Is the functional area responsible fro planning and preparing internal financial information such as budget, which then act to guide the financial decision - making of the business in the forthcoming financial year. |
| What is human resources? | It is the functional area which relates to managing the overall relationship the business |
Created by:
JOSHUAJB2009
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