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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

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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