Business Activity

1
Business Activity The Changing Environment
2
Task 1

• Write down your name and what grade you would
  like to achieve in Business how you expect to
  get that grade

3
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/

4
Your activity

• Write down three things that a business may aim
  to do from the beginning
• What do you think their objectives would be?

5
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?

6
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

7
Year 10 BusinessBusiness activity the changing
environment
8
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

9
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?

10
Types of businesses

• Sole Trade
• Partnerships
• Private Limited Company (LTD)

• Public Limited Company (PLC)
• Co-operatives
• Franchises

11
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

12
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

13
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

14
Examples of Sole Traders

• Corner shop
• Coffee shop
• Carpenters

15
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

16
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

17
Examples of partnerships

• Doctors
• Accountants
• Solicitors

18
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

19
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

20
Your task

• Why is it important that a business has a deed of
  partnership?
• Why do you think partnerships are a good idea?

21
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

22
Business Activity and the changing environment
23
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

24
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

25
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

26
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

27
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

28
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

29
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

30
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

31
Sources of finance

• Internal sources of finance
• External sources of finance

32
Internal sources of finance

• Retained profits
• Stock reduction
• Assets sale
• Limiting credit to customers

33
External sources of finance

• Owners capital
• Hire purchase and leasing
• Overdrafts and loans
• Grants

34
Franchises Sources of Finance
35
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

36
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

37
What is a franchise?

• Involves paying a fee agreeing to produce goods
  exactly in accordance with the franchise
  companys policy
• Payments are made on a regular basis depending on
  profits made
• Training supervision are provided

38
Your task

• Create a newspaper advert selling a franchise
• Example
• Mc Donalds largest restaurant for sale as a
  going concern to suitable franchisee(address)
• Excellent trading figures, full training
  provided. Price 375,000

39
The Stock marketInternet site
40
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

41
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

42
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

43
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 peoples ability to pay them

44
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

45
Factors of production

• These four factors of production are the
  resources that are used to produce the economys
  goods services
• Land
• Labour
• Capital
• Enterprise

46
Factors of production

• Land
• All businesses need land to create their products
• They may use the land, build on the land or
  extract from the land

• Labour
• Businesses need to employ people to make and
  market their products
• The UKs labour force is made up of all the men
  women who are available to work

47
Factors of production

• Enterprise
• The entrepreneur owns the business and is
  prepared to take the chance that his or her
  product will be a success

• Capital
• To make their goods or to provide their services,
  firms need to invest money in machinery,
  buildings, vehicles and other major resources

48
Cash Flow
49
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

50
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
51
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 dont have enough to
  pay bills

52
Poor cash flowbig problems

• Not enough cash to pay daily expenses
• Lack of working capital
• Staff dont get paid on time
• Creditors may not get paid on time
• May become bankrupt

53
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?

54
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

55
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

56
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

57
Tick which source of finance is necessary for the
following
Short term Medium term Long term
Stock for resale 10, 000
Premises 120,000
Machinery 50,000
Vehicles 18,000
Land 60,000
Oil 2000
Wages 1800
Telephone 400
Computers 6000


58
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

59
Starter Activity

• Customers are an example of a firms
  ------------(12)
• Business objectives are set by the ------(6)
• An example of an internal stakeholder group is
  ---------(9)
• Public sector organisations have objectives based
  on -------(7)

60
Stakeholders

• Internal-owners, managers, directors
• Variable costs
• External-local community, bank, suppliers

61
Your task

• Select a business of your choice and write about
  the various stakeholders that would be affected
  by it

62
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
63
Judging success-how are objectives measured?

• Size
• Turnover/market share
• Shareholders
• Number of employees/staff turnover
• Customer satisfaction/number of complaints

64
Factors of production
65
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

66
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)

67
Areas to be covered

• Primary Industry
• Secondary Industry
• Tertiary Industry
• Employment

68
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

69
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

70
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

71
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

72
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

73
Starter Activity

• Factors of production jumbled up words
• Access business studies on line
• http//www.businessstudiesonline.co.uk/GcseBusines
  s/Activities/Module1/Module1Menu.htmGCSEBusMod1Fa
  ctors

74
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

75
Methods of production

• Batch production
• When there is more than one item made
• Each batch of products are finished before the
  next batch

76
Methods of production

• Mass production
• When identical items are made on a production
  line
• The product moves from one stage to the next

77
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

78
Starter Activity

• Refer to hand out sheet
• Also grade or no grade quiz
• http//www.businessstudiesonline.co.uk/GcseBusines
  s/Activities/Module4/Module4Menu.htmGCSEBusMod4Pr
  oductionMethods

79
Factors of location PEST analysis
80
Starter Activity

• Describe what is meant by batch production
• A cost which remains the same regardless of the
  level of production is _____ cost
• A cost which changes according to the level of
  production is a _____ cost

81
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)

82
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

83
Your Task

• Choose an organisation of your choice and outline
  what type of production mostly suits them and
  give relevant reasons why

84
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

85
The P.E.S.T analysis

• 15th October 2007

86
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)

87
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

88
The steps involved
Environmental Scan
External analysis
Internal analysis
Microenvironment
Ma croenvironment
P.E.S.T
89
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

90
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

91
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

92
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

93
Case study

• Relate to the p.e.s.t case study
• Read through case study and answer questions
  based on this case study

94
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

95
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

96
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

97
The E.U
98
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

99
Starter Activity

• The face off quiz on www.businessstudiesonline.com
  where you answer a series of questions based on
  the E.U

100
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

101
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

102
Task 1

• Write down three things that you know about the
  E.U already
• One
• Two
• Three
• Compare answers and then list on board

103
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

104
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

105
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

106
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

107
The European Union
108
Introduction of the euro

• In 1999 the EU introduced the euro
• Has been adopted by 13 member states

109
Your task

• Name the country
• www.businessstudiesonline.com
• The drag and drop section

110
Members of the E.U

• Czech Republic
• Poland
• France
• Albania
• Sweden
• Lativa
• Serbia
• Belgium

• Moldova
• Slovakia
• Estonia
• Iceland
• U.K
• Luxembourg
• Romania

111
Members of the E.U

• Bulgaria
• Switzerland
• Greece
• Finland
• Ukraine
• Spain
• Ireland
• Hungary
• Austria
• Italy

• Lithuania
• Montenegro
• Slovenia
• Denmark
• Malta
• Belarus
• Netherlands
• Cyprus
• Norway
• Germany
• Potugal

112
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

113
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

114
Importance of the E.U

• The European Union contains four of the worlds
  major economic powersFrance, Germany, Italy and
  the U.K
• The E.U is now the UKs main market

115
U.K imports in 2000
The EU58 Rest of Europe6 North
America15 Rest of the world21
116
U.K Exports in 2000
The EU54 Rest of Europe7 North
America15 Rest of the world24
117
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

118
Purpose of the single market

• Free movement of people (labour)
• Free movements of goods (no internal tariffs)
• Common technical and other standards

119
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

120
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

121
Your task

• In the EU what is the social charter?
• What is the difference between the eurozone and
  the euro?
• What does the EUs single market seek to do?

122
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

123
Plenary

• Test the person beside you regarding the true and
  false statements and see if their answers have
  changed

124
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

125
Starter

• List ways that a business may grow
• Create a spider diagram to display these

126
How a business grows

• There are several methods to measure an
  organisations size
• Profits
• Turnover
• Employees
• Capital employed

127
Profits and turnover

• Profits-how much the business keeps from selling
  its goods and services
• Turnover-the sales that the business makes

128
Employees and capital employed

• Employees-the number of people employed in the
  business
• Capital employed-the resources the business has
  invested in it

129
Key terms

• For a firm, greater size through growth makes
• Economies of scale possible
• Survival more likely

130
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

131
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
  companys voting shares to take control

132
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

133
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

134
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 companys voting shares
Retained profits Way of comparing a businesses size
Economies of scale Takes place between two companies through their agreement
135
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

136
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

137
Your task

• Create a spider diagram showing the positive and
  negative externalities

Positive
Negative
138
Year 10 Business

• Monday

139
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

140
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
141
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

142
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

143
Visible trade

• Is the export and import of goods
• Dairy produce, livestock, machinery, oil,
  clothes, shoes are all examples of visible trade

144
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

145
Your task

• Outline on a spider diagram the reasons why the
  U.K imports and exports

Importing
Exporting
146
Reasons for importing

• Climate is not suitable to produce all crops
• Lack natural resources
• Needs to import certain raw materials
• Wider choice

147
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

148
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?

149
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
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Year 10 Business

• Wednesday

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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

152
Starter Activity

• Why do businesses need finance?
• Give two examples of sources of finance
• Give two examples of each of the two finance types

153
Internal sources of finance

• Retained and using profits
• Selling assets
• Using trade credit
• Investing any surplus cash
• Reducing stocks held

154
External sources of finance

• Personal savings
• Borrowings
• Issuing shares
• Loans and mortgages
• Overdrafts
• Factoring debts

155
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

156
Preference shares

• These dont 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

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Your task

• List three reasons why businesses need finance
• State two differences ordinary shares and
  preference shares

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Ordinary and preference shares
Ordinary Preference
Voting rights? Normally one per share Usually non-voting
Dividend Payment? Variable Fixed
Capital repaid? Paid after preferencerepaid last Paid before ordinaryrepaid before ordinary
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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)