Topic 1.3
, 1.3.1
Aims - the strategic goals of a business
Objectives - more specific steps to achieve the aims
Business aims and objectives when starting up:
- Financial objectives:
- Survival
- Profit
- Sales
- Market share
- Financial security
- Non-financial objectives:
- Social objectives
- Personal satisfaction
- Challenge
- Independence
- Control
Private sector(businesses not owned by government) objectives:
- Maximise profits
- Increase market share
- Expand business
Public sector objectives:
- Meet customer targets
- Keep costs low
Non-profit sector:
- Increase revenue from donations
- Reduce costs
- To provide for those in need
1.3.2
Revenue - money coming into the business through sales from goods or services
Revenue = price x quantity sold
Fixed costs - costs that do NOT vary with the level of output or sales.
Example: rents, advertising, insurance, salary(*not wages)
Variable costs - costs that do vary with the level of output or sales.
Example: raw materials, distribution costs, wages(for temporary staff)
Total cost - all the costs in the business
Total cost = fixed costs + variable costs
Profit - the amount of money left over after deducting the total costs.
Gross profit = revenue - cost of goods (ONLY THAT)
Net profit = Gross profit - expenses Net profit = Revenue - Total Expense
Interest - the fee a business pays a lender (creditor) to borrow money
Interest% = (Total repayment - borrowed amount)/borrow amount x 100
, 1.3.1
Aims - the strategic goals of a business
Objectives - more specific steps to achieve the aims
Business aims and objectives when starting up:
- Financial objectives:
- Survival
- Profit
- Sales
- Market share
- Financial security
- Non-financial objectives:
- Social objectives
- Personal satisfaction
- Challenge
- Independence
- Control
Private sector(businesses not owned by government) objectives:
- Maximise profits
- Increase market share
- Expand business
Public sector objectives:
- Meet customer targets
- Keep costs low
Non-profit sector:
- Increase revenue from donations
- Reduce costs
- To provide for those in need
1.3.2
Revenue - money coming into the business through sales from goods or services
Revenue = price x quantity sold
Fixed costs - costs that do NOT vary with the level of output or sales.
Example: rents, advertising, insurance, salary(*not wages)
Variable costs - costs that do vary with the level of output or sales.
Example: raw materials, distribution costs, wages(for temporary staff)
Total cost - all the costs in the business
Total cost = fixed costs + variable costs
Profit - the amount of money left over after deducting the total costs.
Gross profit = revenue - cost of goods (ONLY THAT)
Net profit = Gross profit - expenses Net profit = Revenue - Total Expense
Interest - the fee a business pays a lender (creditor) to borrow money
Interest% = (Total repayment - borrowed amount)/borrow amount x 100
