Business

Business Activity
Activity &
& The
The
Changing
Changing Environment
Environment
 Task 1

• Write down your name and what

grade you would like to achieve in
Business & how you expect to get
that grade
 What is business?
• A place where a firm buys and sells
things in exchange for money

• They aim to make a profit

• What ways do you think they could

make a profit/
 Your activity
• Write down three things that a
business may aim to do from the
beginning

• What do you think their objectives

would be?
 Task 2
• Think of 1 business that you are
familiar with & write down three
things about this business

• Why do you think this business is

successful?
 Homework
• Pick an organisation that you either like or
dislike
• Research the company and give your
findings
• Headings may include, company history,
products/services, employees, market
share etc
• Please do not copy from internet
 Year
Year 10
10 Business
Business
Business
Business activity
activity &
&
the
the changing
changing
environment
environment
 Objectives
W.A.L.T:
 Distinguish between the different types
of business organisations
 Explain what these different types of
organisations offer
W.I.L.F:
 You to give your own thoughts& opinions
 You to participate
 You to work as part of a team
 Starter activity
• What are the functions of a business?

• List all the people that are involved in

a business

• What ways can people raise finance

for their business?
 Types of businesses

• Sole Trade • Public Limited

Company (PLC)
• Partnerships
• Co-operatives

• Private Limited
Company (LTD) • Franchises
 Sole Trader
• An individual which trades under his/her own name

• Is totally independent

• Makes all the important decisions

• Responsible for paying all of the debts

• Few formalities in setting up

• Can employ as many people as he/she wishes

 Advantages of a Sole
Trader

• Decisions can be made quickly

• Leads to greater interest & more dedicated &
hard working owner
• Profits are kept by the sole trader
• Paperwork is minimal
• Easy to start trading as the sole trader
• Has close contact with employees and customers
• Problems are easier to solve
Disadvantages of a Sole
Trader
• Personally liable for all debts that it occurs (unlimited
liability)

• Less capital available for expansion

• Taxed at a higher rate than a private company

• May have difficulty in managing all business functions

• When the sole trader dies so does the business

• Raising capital could be difficult for one person

 Examples of Sole
Traders
• Corner shop

• Coffee shop

• Carpenters
 Your task
• Suggest two advantages & two
disadvantages of a person setting up
as a sole trader

• List two objectives that a sole trader

may have
 Partnerships
• Can have between 2 & 20 partners

• Set up under the Partnership Act 1890

• A partnership deed can be used to set

out the rights of the partners

• Aim to make a profit

Examples of partnerships
• Doctors

• Accountants

• Solicitors
Advantages of a partnership

• More capital is available than for the

sole trader because more people are
contributing
• Better use of business expertise because
each partner can concentrate on what
they are good at
• Better decision making because decisions
are made after discussions
 Disadvantages of
Partnerships
• Group decision making may cause conflict
between partners

• Like sole traders, partners have unlimited

liability thus they are liable for all the debts of
the business

• Decision making can be slower which can lead to

inflexibility

• Profits must be shared

 Your task
• Why is it important that a business
has a deed of partnership?

• Why do you think partnerships are a

good idea?
 Key terms
Unlimited liability
The owners are personally responsible
for paying debts if the business goes
bankrupt

Limited liability
If the company goes into liquidation, the
shareholders of the company are not
responsible for paying the debts of the
business
Business
Business Activity
Activity and
and
the
the changing
changing
environment
environment
 Objectives
W.A.L.T:
• Explain the different types of business
organisations
• Examine the different finance methods available
to business
W.I.L.F:
• Your participation
• Your ideas and opinions
• Complete tasks
 Starter Activity
• You have started up your own
business in Nottingham

• Make a list of all the things which

are necessary to make this business
successful
Private Limited Company
• A company that is a legal entity in its
own right
• It can be sued and can sue
• Shareholders own the business
• A group of between 2 & 50 people who
buy the shares are called the
shareholders
• Cannot sell shares to the public
 Public Limited Company
• Can sell their shares to members of the
public through the stock exchange

• Must have at least 7 shareholders with

no maximum limit

• Must issue a prospective detailing the

history of the company & inviting the
public to buy shares
 Public Limited Company
• Shares are bought & sold on the
stock exchange

• Accounts must be published and

audited on an annual basis

• An annual report must also be

compiled each year
 Advantages of a public
limited company
• Limited liability
• Easier than private limited company to
raise capital
• Attract top management because of
public image
• Continuity of existence
• Lots of publicity based on stock
exchange quotations
 Disadvantages of a
public limited company
• High formation costs

• Accounts have to be published

• Profits must be distributed to shareholders

• Ownership & control are separated because

although the shareholders own the company the
Board of Directors make the decisions
 Key Terms
Shares
• These are long term sources of finance
• Sold to people who become shareholders of the company
• A plc is able to advertise its shares for sale to the general public
• A private limited company must sell their shares privately

Shareholders
• These are people who own part of the Business
 Sources of finance
• Internal sources of finance

• External sources of finance

 Internal sources of
finance
• Retained profits

• Stock reduction

• Assets sale

• Limiting credit to customers

 External sources of
finance
• Owners capital

• Hire purchase and leasing

• Overdrafts and loans

• Grants
Franchises
Franchises &
& Sources
Sources
of
of Finance
Finance
 Objectives
W.A.L.T:
 Evaluate the idea of owing a franchise&
determining what advantages & disadvantages
there are associated with it
 Distinguish between the various sources of
finance available to businesses
W.I.L.F:
 You to create a suitable advert for the sale of
a franchise
 You to answer multiple choice questions and
exam style questions
 Starter Activity
• What are the various businesses organisations
that we have done?

• What is an entrepreneur?

• What are the characteristics of an entrepreneur?

• What are the two sources of finance called?

• List three finance methods associated with each

 What is a franchise?
• Involves paying a fee & agreeing to produce
goods exactly in accordance with the
franchise company’s policy

• Payments are made on a regular basis

depending on profits made

• Training & supervision are provided

 Your task
• Create a newspaper advert selling a
franchise
• Example:
Mc Donald’s largest restaurant for
sale as a going concern to suitable
franchisee(address)
Excellent trading figures, full
training provided. Price £375,000
The Stock market
Internet site
 The public and private
sector
• The public sector includes everything that is
owned by the government

• Examples-army, police force, schools &

hospitals

• Public means that they are owned by the

government for the benefit of the people who
run them
 The public and private
sector
• The private sector contains all the
businesses owned by private individuals

• Almost all the businesses you can think of

are in the private sector

• Private means that these businesses are run

for the benefit of the people who own them
 Strengths of the free market
private sector
• Employers & employees can create their own personal
wealth through the profit motive & hard work

• A greater range of products are supplied

• People have greater freedom to choose & but what

they want

• Competition helps keep prices down & encourages new

ideas
 Strengths of the planned public
sector

• Public services do not depend on the

profit motive & will be supplied even
at a loss

• The provision of basic services

available to all regardless of people’s
ability to pay them
 Objectives
W.A.L.T:
 Outline the various factors of production
 Explain how each factor is important to a business

W.I.L.F:
 You to distinguish between the different factors
of production
 You to start working on cash flow and its
importance
 Factors of production
• These four factors of production are the
resources that are used to produce the
economy’s goods & services
• Land
• Labour
• Capital
• Enterprise
 Factors of production
Land Labour
 All businesses need  Businesses need to
employ people to make
land to create
and market their
their products products

 They may use the  The UK’s labour force

land, build on the is made up of all the
land or extract men & women who are
available to work
from the land
 Factors of production
Capital Enterprise

 To make their goods  The entrepreneur

or to provide their
owns the business
services, firms need
to invest money in and is prepared to
machinery, buildings, take the chance
vehicles and other that his or her
major resources product will be a
success
Cash
Cash Flow
Flow
 Objectives
W.A.L.T:
 Create a cash flow statement
 Differentiate between fixed & variable
costs & total costs

W.I.L.F:
 You to create a cash flow with various
figures given
 Starter Activity-match the key
word to the meaning
Sole Trader You must pay back what
you put in & all debt
Entrepreneur You only lose the amount
of money put into the
business
Limited Liability An individual willing to
take risks in setting up a
business
Unlimited Liability Business organisation
that is owned by a single
person
 Cash Flow
• Is the flow of all money into and out
of the business

• Cash flow is important because if

there is not enough money flowing in
you don’t have enough to pay bills
 Poor cash flow=big
problems
• Not enough cash to pay daily expenses

• Lack of working capital

• Staff don’t get paid on time

• Creditors may not get paid on time

• May become bankrupt

 Your task
1) What is a cash flow?

2) Why should a business prepare a cash

flow?

3) Why does a business need to keep an

eye on their finances?
Reasons for preparing a
cash flow
• Lets a business know if they will have
enough money to meet payments due

• Indicates which months there will be

a cash shortage
 How to prepare a cash
flow
• Estimate money coming in

• Estimate money going out

• Subtract payments from receipts

• The closing balance will be the opening

balance for the following month
 The different costs
involved
Fixed costs:
 Costs which have to be paid no matter
what has been sold or produced
Variable costs:
 Costs that vary according to the amount
produced or sold
Total costs:
 Fixed costs + variable costs
 Tick which source of finance
is necessary for the following
£ Short term Medium Long term
term
Stock for 10, 000
resale
Premises 120,000
Machinery 50,000
Vehicles 18,000
Land 60,000
Oil 2000
Wages 1800
Telephone 400
Computers 6000
 Objectives
W.A.L.T:
 Distinguish between the various types of
stakeholders
 Match the type of stakeholder to a various
aim
W.I.L.F:
 You to relate questions to lessons that we
have completed already
 Starter Activity
1. Customers are an example of a firm’s ------------
(12)

1. Business objectives are set by the ------(6)

1. An example of an internal stakeholder group is

---------(9)

1. Public sector organisations have objectives based

on -------(7)
 Stakeholders
• Internal-owners, managers, directors
Variable costs:

• External-local community, bank,

suppliers
 Your task
• Select a business of your choice and
write about the various stakeholders
that would be affected by it
 Match an appropriate aim to
each stakeholder group
Group Aim

Customers No pollution

Local Community A return on their

investment
Lenders Job security

Employees Lower prices

 Judging success-how are
objectives measured?
• Size

• Turnover/market share

• Shareholders

• Number of employees/staff turnover

• Customer satisfaction/number of complaints

Factors
Factors of
of production
production
 Objectives

W.A.L.T:
 Examine the different factors of production and
how they affect a business
 Relate the factors of production to a particular
business situation

W.I.L.F:
 Your thoughts and opinions based on these topics
and how they would relate them to a particular
business scenario
 Starter Activity
• What are the four factors of production?
• Explain what is meant by each of those factors

Fill in the blanks:

 Employees earn -----(w)
 The owners of capital receive --------(I)
 Entrepreneurs make -------(p)
 The owners of land receive ----(R)
 Areas to be covered
• Primary Industry

• Secondary Industry

• Tertiary Industry

• Employment
 The primary industry
• These are businesses that extract
something e.g. coal, oil, stone, fish
and ore

• The location of these businesses

usually depends on where the
resources being extracted are found
The secondary industry
• Theses are businesses that construct
or manufacture something

• Their location is influenced by many

factors such as government support
and the existence of a suitable
labour force
 The Tertiary industry
• This is the service sector and supports the
other two industries

• Services include transport, finance, insurance,

training and advertising

• Their location will be influenced by the services

required by firms in the other two industries
 Your task
Classify each of these businesses as either
primary, secondary or tertiary:
 A specialist distribution firm
 A builder
 A building society
 A forestry plantation
 A computer manufacturer

List four major influences on location

 Objectives

W.A.L.T:
• Distinguish between the different types of
production
• Categories different items into the correct
production method

W.I.L.F:
• You to distinguish between the different
production methods and give relevant examples
 Starter Activity
• Factors of production –jumbled up words

• Access business studies on line

• http://www.businessstudiesonline.co.uk/Gc
seBusiness/Activities/Module1/Module1Me
nu.htm#GCSEBusMod1Factors
 Methods of production
Job production:

• when a business makes a single one of

product
• The job is often built by skilled labour
working to the customer requirements
• Since only one item is made the business
may not gain economies of scale
 Methods of production

Batch production:

 When there is more than one item

made
 Each batch of products are finished
before the next batch
Methods of production
Mass production

• When identical items are made on a

production line

• The product moves from one stage to

the next
Chose either job, batch
or mass
• Cans of paint
• A factory extension
• Shoes, size 7
• Television
• The channel Tunnel

State one advantage and one disadvantage

of mass production
 Starter Activity
• Refer to hand out sheet

• Also grade or no grade quiz

• http://www.businessstudiesonline.co.uk/Gc
seBusiness/Activities/Module4/Module4M
enu.htm#GCSEBusMod4ProductionMethod
s
Factors
Factors of
of location
location &
&
PEST
PEST analysis
analysis
 Starter Activity
1) Describe what is meant by batch
production

2) A cost which remains the same

regardless of the level of production is
_____ cost

1) A cost which changes according to the

level of production is a _____ cost
 Developments in
production
• Just in time-only buy stock as you need them,
no need for additional storage facilities

• Cell production-where people make a particular

part of the product and moves continually

• Kaizen-invest in skilled people rather than

technology ( continuous improvement)
 Lean production
• Refers to the various ways that are now
used to improve the efficiency of
production

• Tries to cut development time

• Associated with just in time, cell production

and the Kaizen system
 Your Task
• Choose an organisation of your choice
and outline what type of production
mostly suits them and give relevant
reasons why
 The Government
• They create various laws and regulations
that affect businesses

• The EU and the UK Government also support

firms

• The Government want to be paid VAT and

taxes
The
The P.E.S.T
P.E.S.T analysis
analysis
15th October 2007
 Objectives
W.A.L.T:
 The importance of the p.e.s.t analysis on a
business
 Distinguish the difference between P.E.S.T

W.I.L.F:
 You to relate the p.e.s.t analysis to a
particular business (case study)
 The PEST analysis
Refer to the handout

 A scan of the external macro-environment in

which the firm operates can be expressed as;

 Political
 Economic
 Social
 Technological
 The steps involved
Environmental Scan

External analysis Internal analysis

Microenvironment Ma
croenvironment

P.E.S.T
 Political Factors
• These include government regulations &
legal issues

• Defines both formal & informal rules

• Examples-tax policy, employment laws,

environmental regulations, trade
restrictions and tariffs, political stability
 Economic Factors
• Economic factors affect the
purchasing of potential customers
and the firms cost of capital

• Examples-economic growth, interest

rates, exchange rates, inflation rates
 Social Factors
• These include demographic and cultural aspects
of the external microenvironment

• These affect customer needs and the size of

potential markets

• Examples-health consciousness, population

growth rate, age distribution, career attitudes,
emphasis on safety
 Technological Factors
• These can lower barriers to entry, reduce
minimum efficient production levels and
influences outsourcing decisions

• Examples-research and development,

automation, technology incentives, rate of
technological change
 Case study
• Relate to the p.e.s.t case study

• Read through case study and answer

questions based on this case study
 The Business Cycle
• This shows the regular patterns of upturns and
downturns of the level of output in the economy

• Goes through stages-boom, slump, recovery

• Diagram

• The business cycle business studies on line part

 The phases
• Boom-is the part of the business cycle in
which output rises

• Slump-is a severe form of recession

• Recovery-is the part of the business cycle

when output begins to grow again after a
slump
 Your task
• Look at the shops, offices or
factories in Witham. Have any of
them opened or closed recently?

• Are there other reasons or is it a

result of the business cycle
The
The E.U
E.U
 Objectives
W.A.L.T:
 Understand the purpose of the European
Union
 Determine what has happened since the
introduction of the E.U
W.I.L.F:
 You to answer the questions based on the
European Union
 Starter Activity
• The face off quiz on
www.businessstudiesonline.com where
you answer a series of questions
based on the E.U
 What is the E.U?
• This is a political and economic community

• Made up of 27 countries member states

located in Europe

• In 1957 6 European countries formed the

European Economic Community (EEC) by the
Treaty of Rome
 What has happened
since then?
• The EU has grown in size through
new member states

• In 1993, the Maastricht Treaty

established the base of the current
legal framework
 Task 1
• Write down three things that you
know about the E.U already
• One
• Two
• Three
• Compare answers and then list on
board
The purpose of the E.U
• The EU created a single market which
seeks to guarantee the freedom of
movement of people, goods, services and
capital between member states

• It maintains a common trade policy,

agricultural and fisheries policies and a
regional development policy
 Advantages of the EU

• Free Trade (no tariffs or quotas) benefits industries as they

have a larger market to sell their goods to
• Greater co-operation between countries should prevent the
outbreak of war between members
• Greater cultural understanding results from freedom to
travel within the EU
• The E.U has a greater influence on world events than the
individual countries could have
• European Union regional development funding has improved
conditions in the poorer countries and areas
 Disadvantages of the
E.U
• Goods cost more to import from non-EU
countries due to tariffs
• E.U funded schemes such as the Common
Agricultural Policy, are expensive,
inefficient and sometimes corrupt
• It reduces the political independence of
each country-decisions are taken for all
countries by the European Parliament
 Task Two
• Look at the handout regarding the history
of the E.U

• Draw arrows to link to the correct

sequence of events

• Discuss with your partner and then draw

in the arrows
The
The European
European Union
Union
 Introduction of the
euro
• In 1999 the EU introduced the euro

• Has been adopted by 13 member

states
 Your task
• Name the country

• www.businessstudiesonline.com
• The drag and drop section
 Members of the E.U
• Czech Republic • Moldova
• Poland • Slovakia
• France
• Estonia
• Albania
• Sweden
• Iceland
• Lativa • U.K
• Serbia • Luxembourg
• Belgium • Romania
 Members of the E.U
• Bulgaria • Lithuania
• Switzerland • Montenegro
• Greece • Slovenia
• Finland • Denmark
• Malta
• Ukraine
• Belarus
• Spain
• Netherlands
• Ireland • Cyprus
• Hungary • Norway
• Austria • Germany
• Italy • Potugal
 Business and the EU
• Has helped increase trade between
member countries

• Businesses has the opportunity to expand

• The Eu has tried to protect businesses by

imposing custom duties on goods imported
into the EU
 Homework
Essay (Red tasks)
Why are more countries wanting to join
the European Union/ What might their
concerns be?
Yellow tasks
• Create a poster about the European union.
On the poster include a small map of the
E.U, information about the E.U, the
countries in the E.U and the purpose of
the E.U
 Importance of the E.U
• The European Union contains four of
the world’s major economic
powers;France, Germany, Italy and
the U.K

• The E.U is now the UK’s main market

U.K imports in 2000
UK imports 2000

EU
Rest of Europe
North America
Rest of the world

The EU=58%
Rest of Europe=6%
North America=15%
Rest of the world=21%
U.K Exports in 2000
UK imports 2000

EU
Rest of Europe
North America
Rest of the world

The EU=54%
Rest of Europe=7%
North America=15%
Rest of the world=24%
 The single market
• Promoting trade between the
member states was a major influence
in establishing the EU

• Its common market is now a single

market consisting of about 400
million people
 Purpose of the single
market
• Free movement of people (labour)

• Free movements of goods (no internal

tariffs)

• Common technical and other standards

 How the single market has
influenced UK businesses in
several ways
• Common standards of quality and safety

• Open market encourages competition

• Free movement of labour and good

encourages employment and skills
development
 The monetary union
• Economic and monetary union is closely
linked with the euro and eurozone

• The single currency will affect the EU:

• Trade will be valued in euros, exchange
rate fluctuations will have an impact and
also price difference may cause problems
 Your task
• In the EU what is the social charter?

• What is the difference between the

eurozone and the euro?

• What does the EU’s single market seek

to do?
 Answers
• A charter protecting the rights of workers

• Eurozone is the member states who have

signed up to the single currency. The euro is
the name of the single currency

• Provides free movement of labour and goods

and establish common technical standards
 Plenary
• Test the person beside you regarding
the true and false statements and
see if their answers have changed
 Objectives
W.A.L.T:
 Determine how businesses grow
 Discuss how businesses grow internally

W.I.L.F:
 You to create a spider diagram outlining how
businesses grow
 You to participate and engage fully in lesson
 Starter
• List ways that a business may grow

• Create a spider diagram to display

these
 How a business grows
• There are several methods to
measure an organisation’s size:
• Profits
• Turnover
• Employees
• Capital employed
 Profits and turnover
• Profits-how much the business keeps
from selling its goods and services

• Turnover-the sales that the business

makes
 Employees and capital
employed
• Employees-the number of people
employed in the business

• Capital employed-the resources the

business has invested in it
 Key terms
For a firm, greater size through
growth makes:

• Economies of scale possible

• Survival more likely
 How can firms grow
internally?
• They grow organically

• Can grow through mergers or takeovers

• This usually happens when an organisation

sell more of its existing products, starts
selling new products and when businesses
enter new markets
 Integration
• In a merger two companies agree to join

• This external growth is the quickest way for

organisations to grow

• In a takeover one company buys enough of

another company’s voting shares to take
control
 Economies of scale
• They are the reasons why the average cost
of production may fall with increasing
levels of output

• What is your opinion? Would it be a good

idea for a company to produce in large
amount or do you think they should only
produce as needs be
 Task
• You own a small business and you want to
ensure that your business provides the
best possible service to their customers

• Create a questionnaire finding out if

customers are happy with the service they
are getting from your company
 Starter Activity
Merger The businesses own money
that is ploughed back in
Takeover If large amounts are made and
it reduces the average cost
Turnover When one company buys
enough of another company’s
voting shares
Retained profits Way of comparing a
businesses size
Economies of scale Takes place between two
companies through their
agreement
 Externalities
• All businesses bring benefits to people
and others outside the business this is
called externalities

• Externalities are costs or benefits

arising from business activity that are
experienced by people or organisations
outside the firm
 Example
• A new housing developing is opening up in Witham

• They are aimed at people from deprived areas

• These people have been involved in crime and

substance abuse

• You must outline the negative and positive

externalities associated with this venture
 Your task
• Create a spider diagram showing the
positive and negative externalities

Positive Negative
Year
Year 10
10 Business
Business
Monday
 Objectives
W.A.L.T:
 Distinguish between imports and exports
 Distinguish between visible and invisible
trade
W.I.L.F:
 You to complete the starter activity
 You to answer the questions based on
importing and exporting
 Starter Activity
Home Trade The export and import of
services
Importing Selling to other countries

Exporting The import and export of

goods
Visible Trade Buying or selling to
people in same country
Invisible Buying from other
countries
 Trading
• Is the buying and selling

• Home trade is when businesses buy or sell

goods to people in the same country

• When businesses buy or sell from other

countries outside the home country is
foreign trading
Importing vs. exporting
• When businesses buy goods or
services from other countries is
called importing

• When businesses sell goods or

services to another country is called
exporting
 Visible trade
• Is the export and import of goods

• Dairy produce, livestock, machinery,

oil, clothes, shoes are all examples of
visible trade
 Invisible trade
• Is the export and import of services

• When Americans or other foreign

tourists come to the U.K on holidays,
it is an example of invisible trade
 Your task
• Outline on a spider diagram the
reasons why the U.K imports and
exports

Importing Exporting
 Reasons for importing
• Climate is not suitable to produce all crops

• Lack natural resources

• Needs to import certain raw materials

• Wider choice
 Reasons for exporting
• Easier for the U.K to produce agricultural
produce because of climate

• Businesses need more than the home market

• Creates extra employment

• Foreign currency
 Task
• Explain the difference between home
trade and foreign trade?

• Give three reasons why the U.K imports

goods from other countries

• Why do we export to other countries?

 Task-tick the correct
answer
Exports Imports

U.K tourists going

to Italy

U.K computer
parts sold to
France
An U.K business
buying parts from
China
Year
Year 10
10 Business
Business
Wednesday
 Objectives
W.A.L.T:
 Distinguish between the various types of finance
 Distinguish between ordinary and preference
shares

W.I.L.F:
 You to attempt the starter activity
 You to complete all the relevant task
 Starter Activity
• Why do businesses need finance?

• Give two examples of sources of

finance

• Give two examples of each of the two

finance types
 Internal sources of
finance
• Retained and using profits

• Selling assets

• Using trade credit

• Investing any surplus cash

• Reducing stocks held

 External sources of
finance
• Personal savings

• Borrowings

• Issuing shares

• Loans and mortgages

• Overdrafts

• Factoring debts
 Types of shares
• Two types of shares-ordinary and
preference

• Ordinary shares allow holders to vote at

company meetings

• This makes an ordinary shareholder an

owner of the company
 Preference shares
• These don’t usually give their holders the
right to vote at company meetings

• Preference shareholders receive priority

over ordinary shareholders when it comes
to paying dividends and repaying capital
 Your task
• List three reasons why businesses
need finance

• State two differences ordinary

shares and preference shares
 Ordinary and
preference shares
Ordinary Preference

Voting rights? Normally one Usually non-

per share voting
Dividend Variable Fixed
Payment?
Capital Paid after Paid before
repaid? preference;re ordinary;repai
paid last d before
ordinary
 Homework
• Red task-Choose a business of your choice
and explain what source of finance would be
most adequate for that business to grow

• Yellow task-Write a letter to a company of

your choice explaining the difference
between ordinary shares and preference
shares (you must research)