AQA APPLIED GENERAL BUSINESS
UNIT 1 - FINANCIAL PLANNING
AND ANALYSIS
BUSINESS PLANNING - INVOLVES THE STEPS AN ENTREPRENEUR
MUST TAKE BEFORE ESTABLISHING A NEW ENTERPRISE,
ENSURING A STRUCTURED APPROACH TO LAUNCHING A
BUSINESS.
ENTREPRENEUR - AN INDIVIDUAL WHO POSSESSES A BUSINESS
IDEA AND IS WILLING TO TAKE RISKS
START-UP COSTS - EXPENSES SUCH AS MARKET RESEARCH, LEGAL
ADVICE, FIXTURES, AND PREMISES NECESSARY TO INITIATE A
BUSINESS.
RUNNING COSTS - ONGOING EXPENSES LIKE UTILITIES, WAGES,
MARKETING, AND STOCK REPLENISHMENT THAT ARE ESSENTIAL
FOR DAILY OPERATIONS
PROFIT - THE SURPLUS OF REVENUE OVER TOTAL COSTS
PROFIT = TOTAL REVENUE - TOTAL COSTS
FINANCIAL OBJECTIVES - NUMERICAL TARGETS THAT A BUSINESS
AIMS TO ACHIEVE, SUCH AS PROFIT TARGETS AND ENSURING
SUFFICIENT CASH RESOURCES
RETURN ON INVESTMENT (ROI) - MEASURES THE PROFITABILITY
OF AN INVESTMENT
ROI = (OPERATING PROFIT / INVESTMENT) X 100
A LONG-TERM INVESTMENT IS TYPICALLY DEFINED AS ONE
LASTING THREE YEARS OR MORE
STAKEHOLDER - ANYONE WITH AN INTEREST IN THE BUSINESS
(OWNERS/SHAREHOLDERS/INVESTORS/SUPPLIERS)
, LEGAL STRUCTURES:
SOLE TRADER - INDIVIDUAL WHO OWNS AND RUNS THE BUSINESS
UNLIMITED LIABILITY
PRIVATE FINANCIAL RECORDS
PARTNERSHIPS - INVOLVES TWO OR MORE INDIVIDUALS OWNING
A BUSINESS
SHARE COSTS, RISKS AND RESPONSIBILITIES
UNLIMITED LIABILITY.
PRIVATE LIMITED COMPANY (LTD) - SHARES ARE SOLD ONLY TO
FRIENDS AND FAMILY
LIMITED LIABILITY
SOMEWHAT ACCESSIBLE FINANCIAL RECORDS
PUBLIC LIMITED COMPANY (PLC) - SHARES CAN BE SOLD TO THE
PUBLIC ON A STOCK EXCHANGE
LIMITED LIABILITY
EXPOSES THE COMPANY TO RISKS SUCH AS TAKEOVERS
COMMUNITY INTEREST COMPANY (CICS) - NON-PROFIT
ORGANISATIONS FOCUSED ON COMMUNITY BENEFITS
OFTEN ELIGIBLE FOR GRANTS AND TAX INCENTIVES, BUT FACE
STRICT CRITERIA
COOPERATIVES - ORGANISATIONS THAT OPERATE FOR THE
BENEFIT OF THEIR MEMBERS (CUSTOMERS/ EMPLOYEES/
SUPPLIERS)
FOR-PROFIT ORGANISATIONS =
PROFIT/LOSS/REVENUE/COST
NON-PROFIT ORGANISATIONS =
SURPLUS/DEFICIT/INCOME/EXPENDITURE
UNIT 1 - FINANCIAL PLANNING
AND ANALYSIS
BUSINESS PLANNING - INVOLVES THE STEPS AN ENTREPRENEUR
MUST TAKE BEFORE ESTABLISHING A NEW ENTERPRISE,
ENSURING A STRUCTURED APPROACH TO LAUNCHING A
BUSINESS.
ENTREPRENEUR - AN INDIVIDUAL WHO POSSESSES A BUSINESS
IDEA AND IS WILLING TO TAKE RISKS
START-UP COSTS - EXPENSES SUCH AS MARKET RESEARCH, LEGAL
ADVICE, FIXTURES, AND PREMISES NECESSARY TO INITIATE A
BUSINESS.
RUNNING COSTS - ONGOING EXPENSES LIKE UTILITIES, WAGES,
MARKETING, AND STOCK REPLENISHMENT THAT ARE ESSENTIAL
FOR DAILY OPERATIONS
PROFIT - THE SURPLUS OF REVENUE OVER TOTAL COSTS
PROFIT = TOTAL REVENUE - TOTAL COSTS
FINANCIAL OBJECTIVES - NUMERICAL TARGETS THAT A BUSINESS
AIMS TO ACHIEVE, SUCH AS PROFIT TARGETS AND ENSURING
SUFFICIENT CASH RESOURCES
RETURN ON INVESTMENT (ROI) - MEASURES THE PROFITABILITY
OF AN INVESTMENT
ROI = (OPERATING PROFIT / INVESTMENT) X 100
A LONG-TERM INVESTMENT IS TYPICALLY DEFINED AS ONE
LASTING THREE YEARS OR MORE
STAKEHOLDER - ANYONE WITH AN INTEREST IN THE BUSINESS
(OWNERS/SHAREHOLDERS/INVESTORS/SUPPLIERS)
, LEGAL STRUCTURES:
SOLE TRADER - INDIVIDUAL WHO OWNS AND RUNS THE BUSINESS
UNLIMITED LIABILITY
PRIVATE FINANCIAL RECORDS
PARTNERSHIPS - INVOLVES TWO OR MORE INDIVIDUALS OWNING
A BUSINESS
SHARE COSTS, RISKS AND RESPONSIBILITIES
UNLIMITED LIABILITY.
PRIVATE LIMITED COMPANY (LTD) - SHARES ARE SOLD ONLY TO
FRIENDS AND FAMILY
LIMITED LIABILITY
SOMEWHAT ACCESSIBLE FINANCIAL RECORDS
PUBLIC LIMITED COMPANY (PLC) - SHARES CAN BE SOLD TO THE
PUBLIC ON A STOCK EXCHANGE
LIMITED LIABILITY
EXPOSES THE COMPANY TO RISKS SUCH AS TAKEOVERS
COMMUNITY INTEREST COMPANY (CICS) - NON-PROFIT
ORGANISATIONS FOCUSED ON COMMUNITY BENEFITS
OFTEN ELIGIBLE FOR GRANTS AND TAX INCENTIVES, BUT FACE
STRICT CRITERIA
COOPERATIVES - ORGANISATIONS THAT OPERATE FOR THE
BENEFIT OF THEIR MEMBERS (CUSTOMERS/ EMPLOYEES/
SUPPLIERS)
FOR-PROFIT ORGANISATIONS =
PROFIT/LOSS/REVENUE/COST
NON-PROFIT ORGANISATIONS =
SURPLUS/DEFICIT/INCOME/EXPENDITURE
