Understanding the Nature of Business

Business Activities

Profit Oriented: These activities focus on generating financial gains for stakeholders.
Non-Profit Oriented: These activities focus on charity or social causes, where profit isn’t the primary objective.
Public Sector Operations: This involves running of government bodies to provide services to the public.

Profit Maximisation: Most businesses aim to maximise profit to achieve growth, expansion, and increase shareholder returns.
Sales Maximisation: Businesses may seek to increase the volume of sales which can lead to increase in market share.
Growth: Businesses often strive to expand their operations, size, market presence and product offerings.

Primary Sector: Involves extraction of raw materials - mining, agriculture, fisheries, and forestry.
Secondary Sector: Encompasses industries that produce goods using raw materials - manufacturing, construction.
Tertiary Sector: Provides services to consumers and other businesses - retail, health, education and leisure services.

Sole Traders: Owned and run by one individual with no legal distinction between the owner and the business.
Partnerships: Owned by two or more people with shared decision-making and responsibilities.
Limited Companies: A separate legal entity from its owners, liabilities are limited to the amount invested.
Public Limited Companies (PLCs): Shareholders own the company with shares traded publicly on the stock exchange.

Budget Preparation: This includes preparing detailed financial plans for the upcoming accounting period.
Financial Analysis: Analyses financial performance and indicators like profitability, liquidity and solvency.
Cash Flow Management: This involves monitoring, analysing and adjusting the business’s cash flows.
Decision Making: Financial analysis supports business decisions on investment, funding, and risk management.
Strategic Planning: Outlines long-term goals and plans of the business aligned with financial resources.