3 & 4

Question 1

Problems with measuring business size

Answer 1

• Often give different comparative results
• No internationally agreed definition of a small, medium & large business.

Question 2

Measure of business size, number of employees

Answer 2

Simplest measure
Easy to understand

Question 3

Problem with number of employees when measuring business size

Answer 3

Some businesses only need to employ a few people even though they invested in a lot of capital.

Question 4

Different measures of a business size

Answer 4

• Revenue(sales turnover)
• Number of employees
• Capital employed
• Market capitalisation
• Market shares

Question 5

Revenue(sales turnover)

Answer 5

Total value of sales made during trading period = selling price quantity sold

Question 6

Capital employed

Answer 6

Total value of all long term finance invested in business.

Question 7

Market capitalisation

Answer 7

Total value of a company’s issued shared.

Question 8

Market share

Answer 8

Sales of the business as a proportion of total market sales.