3 size of a business
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3. Size of a business. BUSINESS STUDIES 9708 AS Level Friday 4, October 2013. Measuring Business Size. Several different ways of measuring or comparing the size of a business. No universally accepted measure of size for small, medium, large businesses.

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3. Size of a business

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3 size of a business

3. Size of a business

BUSINESS STUDIES 9708

AS Level

Friday 4, October 2013


Measuring business size

Measuring Business Size

  • Several different ways of measuring or comparing the size of a business.

  • No universally accepted measure of size for small, medium, large businesses.


Different ways of measuring business size

Different ways of measuring business size

  • Number of employees

  • Sales turnover – value of sales in given time

  • Capital employed – total value of long term capital invested

  • Market capitalization – the total value of shares issued

  • Market share – sales of a business as a percentage of total market sales


Other measures

Other measures

  • Industry specific:

    • Hotels & Hospitals: number of rooms, beds.

    • Department stores & Supermarkets: floor space

    • Retailers: number of outlets / shops

    • Commercial banks: number of branches

    • Textile mills: number of spindles or looms


Which measure is best

Which measure is best?

  • No ‘best’ measure.

  • The choice of measure depends on:

    • Whether the firms being considered for absolute or relative size

    • Are the firms within one industry?

  • Usually best to use more than one measure of size.


  • Activities practice questions

    Activities & practice questions

    • Activity 3.1 on page 44

    • Discuss whether all businesses should aim to grow at the fastest rate of growth possible [20]

    • Examine three different ways in which business size may be compared[10]


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