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publicly held company

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31 Terms

1

publicly held company

A company that is publicly owned and and has many shareholders who can buy and sell their shares through a stock exchange.

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2

benefits of a publicly held company

  • finances can be raised through the sale of shares

  • risks can be spread out among a large number of stakeholders.

  • limited liability: if a business fails/incurs losses, personal assets of the shareholders are not at risk.

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3

disadvantages of a publicly held company

  • shared profits between shareholders

  • high costs; time consuming to set up publicly held company.

  • loss of control; to the largest shareholder

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4

break-even point

Break-even point is the level of sales at which total revenue equals total costs, resulting in neither profit nor loss. It is where the company covers all its expenses.

<p><strong>Break-even point</strong> is the level of sales at which total revenue equals total costs, resulting in neither profit nor loss. It is where the company covers all its expenses.</p>
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5

contribution

the difference between the selling price and variable cost of a product

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6

what is outsourcing

Outsourcing is the practice of contracting out certain business functions or processes to third-party providers, often located in other countries, to reduce costs or improve efficiency.

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7

what is offshoring

Offshoring is the practice of moving a company's business processes, such as manufacturing or services, to another country to take advantage of lower costs or other benefits.

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what is insourcing

Insourcing is the practice of performing tasks internally within a company that could be outsourced to an external provider. It involves using the company's own resources and employees to complete the work.

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9

what circumstance can cause a company to insource

A company may choose to insource due to factors like cost savings, quality control, confidentiality concerns, or strategic alignment with core competencies.

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10

what circumstance could cause a company to outsource

A company may outsource due to cost savings, access to specialized skills, focus on core activities, increased efficiency, and global expansion opportunities.

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benefits of offshoring

  • Offshoring can lead to cost savings due to lower labor costs in other countries.

  • It can provide access to a larger talent pool and specialized skills.

  • Offshoring can help companies operate 24/7 due to time zone differences.

  • It may also reduce the time to market for products and services.

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what are the downsides of offshoring

  • Offshoring can lead to job losses in the home country.

  • Quality control issues may arise due to distance and communication barriers.

  • Cultural differences can impact productivity and collaboration.

  • Offshoring may result in data security risks.

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what are the benefits of reshoring

  • Reshoring can lead to reduced transportation costs.

  • It can improve quality control and communication.

  • Reshoring can create jobs and boost the local economy.

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14

average cost

cost per unit of production.

TC of production


number of units produced

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15

“challenge”

factor that hinders the operations/profitability

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16

company

a business owned by shareholders (have limited liability). legal separate entities.

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contract

legally binding agreement between two parties. sets out certain terms and conditions.

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costs

expenditure of a business when producing goods/services

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directors

senior executives in an organization. they hold autonomous, decision-making, responsibility and power.

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employees

internal stakeholder

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21

environmental sustainability

the ability for the business to maintain the use of its resources for future generations. meeting the needs of today without jeopardizing the needs of future generations.

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expansion

the growth of a business due to increased size/growth in the market. measured by increase: sales revenue, market share, profits.

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finances

funds needed for business activities.

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24

how may location of a business affect its profitability

The location of a business can impact profitability through factors like access to customers, labor availability, competition, costs, and regulations.

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25

advantages of businesses using credit cards

  • Convenience: Credit cards offer quick and easy payment options.

  • Cash Flow Management: Helps businesses manage cash flow effectively.

  • Rewards and Perks: Earn rewards and benefits on purchases.

  • Build Credit: Establish and improve business credit history.

  • Security: Offers fraud protection and dispute resolution.

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26

what is a cashflow forecast

A cash flow forecast is a financial document that predicts the inflows and outflows of cash in a business over a specific period, helping to manage liquidity and make informed financial decisions.

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27

what are the benefits of a cash flow forecast

  • Benefits of a Cash Flow Forecast:

    • Helps in managing liquidity

    • Assists in planning for future financial needs

    • Enables better decision-making

    • Identifies potential cash shortages

    • Aids in setting realistic financial goals

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28

what is a freelancer

A freelancer is a self-employed individual who offers services to clients on a project basis, without being bound to a single employer.

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29

what are the benefits of segmentation

  • Segmentation helps target specific customer groups

  • Allows for personalized marketing strategies

  • Enhances customer satisfaction and loyalty

  • Improves product development and innovation

  • Increases overall profitability and competitiveness

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30

why are unique selling points important

Unique selling points (USPs) are important because they differentiate a product or service from competitors, attract customers, and create a competitive advantage.

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