AS Business₇₁₃₁

Why businesses exist

Business objectives such as profit, growth, survival, cash flow, social and ethical objectives

The relationship between mission and objectives

Why businesses set objectives

The measurement and importance of profit

The measurement of profit should include:

• revenue (also turnover and sales)
• fixed costs
• variable costs
• total costs.

Reasons for choosing different forms of business and for changing business form

Different forms of business include:

• sole traders
• private limited companies and public limited companies
• private sector and public sector organisations
• non-profit organisations
• social enterprises

Issues with different forms of business include:

• unlimited and limited liability
• ordinary share capital
• market capitalisation
• dividends.

The role of shareholders and why they invest

Influences on share price and the significance of share price changes

The effects of ownership on mission and objectives

How the external environment can affect costs and demand

Factors influencing costs and demand to include the effect of:

• competition
• market conditions
• incomes
• interest rates
• demographic factors
• environmental issues and fair trade.