MMME2049 L2 Private enteprise

Sales revenue (or just ‘Sales’

financial inflow due to sales

Cost of Goods Sold (COGS) = ____ + ____

= input cost + process cost

Gross profit

sales revenue - COGS

Added value

= sales revenue - input cost

Operating profit

gross profit - operating costs

Primary activities

Inbound logistics

Operations

Outbound logistics

Marketing and sales

Customer support

Secondary activities

Infrastructure

Human resource management

Technology development

Procurement

Company ownership types

Sole Trader

Partnership

Limited Company (Private Limited Company,Public Limited Company)

Peter Drucker eight criteria

1. Market standing

2. Innovation

3. Productivity

4. Physical and financial reserves

5. Profitability

6. Worker performance and attitude

7. Manager performance and growth

8. Public responsibility

a successful company should (4 things)

 Continue to grow

 Show profit

 Gain market share

 Show a dividend for the shareholders

Difference between private and public LTD company

Private LTD : Stocks not in stock market

Public LTD : Stocks can be traded in stock market