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AQA AS-Level Business 7132
What Is Business?
Topic overviewWhy businesses exist and their objectivesRevenue, costs and profitCalculating and presenting business dataBusiness forms, sectors and liabilityShare capital, market capitalisation and dividendsWhat moves a share price, and how ownership shapes objectivesCompetition, market conditions and incomesInterest rates, demographics and environmental issues
Managers, Leadership and Decision Making
Topic overviewManagement, leadership and the four leadership stylesThe Tannenbaum Schmidt continuumChoosing a leadership style and its limitationsScientific and intuitive decision making, and expected valueReading a decision treeRisk, uncertainty and opportunity costWhat influences a management decisionStakeholders and stakeholder mappingStakeholder needs and managing the relationship
Marketing Management
Topic overviewWhy businesses set marketing objectivesBrand loyalty and calculating the marketing measuresPrimary and secondary market researchSampling methodsCorrelation, confidence intervals and extrapolationPrice and income elasticity of demandCalculating market share, market growth and sales growthSegmentation and the bases for itNiche and mass marketing, targeting and market mappingThe elements of the marketing mixProduct portfolio analysis and the Boston MatrixThe product life cycle and extension strategiesPricing, branding, place and the influences on the mix
Operational Management
Topic overviewOperational objectives: cost and qualitySpeed, flexibility and environmental objectivesAdded value and the trade-offs between objectivesLabour productivity and unit costsCapacity and capacity utilisationImproving capacity utilisationRaising labour productivity, and the obstaclesLean production and Just in TimeLabour-intensive and capital-intensive productionTechnology in operationsQuality control and quality assuranceThe benefits and costs of improving qualityMatching supply to demandThe inventory control chartInfluences on inventory and choosing a supplierSupply chain managementOutsourcing: benefits and drawbacks
Financial Management
Topic overviewFinancial objectives and return on investmentGross profit, operating profit and profit for the yearBudgets and variance analysisCash flow forecastsBreak-even, contribution and the margin of safetyBreak-even charts and how they shiftThe uses and limits of break-even analysisProfit margins, payables and receivablesInternal sources of financeShort-term external financeShare capital, loans, venture capital and crowd fundingChoosing a source of financeMethods of improving cash flowMethods of improving profitsThe difficulties and trade-offs in improving cash flow and profit
Human Resource Management
Topic overviewHuman resource objectives and their valueHard and soft human resource managementCalculating labour turnover and labour productivityEmployee costs as a percentage of turnover, and labour cost per unitUsing and interpreting human resource dataTypes of organisational structureSpan of control, hierarchy and delegationHuman resource flowThe value of a motivated workforce, and TaylorMaslow's hierarchy of needsHerzberg's two-factor theoryFinancial methods of motivationNon-financial methods of motivationChoosing and assessing methods of motivationEmployee involvement and the influences on itTrade unions, works councils and communication channelsThe value of good employer-employee relations
What Is Business?
- 8 subtopics
- 22 things to know
- Papers 1, 2 and 3
What What Is Business? covers
What is business? opens the course and can be examined on any of the three papers. It covers what a business is for, the forms it can take and who bears the risk, and the external conditions every business has to trade within.
Where it is assessed
Papers 1, 2 and 3
All three papers may draw on any part of the specification.
Check the AQA specification ↗The 8 subtopics
Each one has its own page. AQA AS Business students sit this topic in the first year.
- Why businesses exist and their objectivesProfit, growth, survival, cash flow, social and ethical objectives, and how a mission relates to them.Open →
- Revenue, costs and profitRevenue, fixed and variable costs, total cost and profit, and why profit matters to a business.Open →
- Calculating and presenting business dataCalculating revenue, total cost and percentage change, and choosing the right chart for the data.Open →
- Business forms, sectors and liabilitySole traders, private and public companies, the public and non-profit sectors, and limited and unlimited liability.Open →
- Share capital, market capitalisation and dividendsOrdinary share capital, shareholder rights, dividends, and calculating market capitalisation.Open →
- What moves a share price, and how ownership shapes objectivesThe internal and external influences on a share price, and how ownership structure shapes the mission.Open →
- Competition, market conditions and incomesHow competition, market conditions and changes in consumer income affect demand and costs.Open →
- Interest rates, demographics and environmental issuesInterest rates, demographic change, environmental pressure and fair trade as external influences.Open →
What you need to know
Answer each one before you reveal it.
Your recallNot started
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How are total costs calculated, and what are variable costs?
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How is profit calculated, and what must be subtracted to find it?
Evaluation
Why does profit matter to owners and to the growth of the business?
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How is revenue calculated, and what happens to fixed and variable costs if production doubles?
Evaluation
Why does a business calculate total costs and profit, and how is percentage change calculated?
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Why calculate percentage change, and which charts present business data?
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What is market capitalisation, and how is it calculated?
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How does ownership structure shape a business's mission and objectives?
Process
What liability do limited companies have, and what is ordinary share capital?
Process
What influences a company's share price?
Process
How does supply and demand affect share prices?
Key term
Why might a sole trader decide to convert their business into a limited company?
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How do market conditions and consumer incomes affect demand?
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What are environmental issues, and how do they affect business costs and demand?
Process
How do demographic change and interest rates affect a business?
Key term
Why does sourcing fair trade products typically increase business costs?
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State the formula for calculating total costs.
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State the formula for calculating profit.
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State the formula for calculating revenue from price and quantity.
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State the formula for calculating a percentage change.
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State the formula for calculating market capitalisation.
Take What Is Business? further
The same content, four other ways.
Commonly confused
Pairs that lose marks when they are blurred together.
Mission vs Objective
Mission: the organisation’s fundamental purpose. Objective: a specific result the organisation intends to achieve.
Stakeholder vs Shareholder
Stakeholder: a party affected by organisational activity. Shareholder: an owner holding equity in a company.
Entrepreneur vs Manager
Entrepreneur: a person who creates and assumes risk for a venture. Manager: a person coordinating established organisational resources.
Questions from this topic
Each one with the model answer underneath.
- 1
Why do businesses exist?
Model answer
Businesses exist to provide goods and services that satisfy customer needs and wants while generating returns for their owners.
- 2
Define profit as a business objective.
Model answer
Profit is the financial gain remaining after all costs have been deducted from revenue.
- 3
What is meant by growth as a business objective?
Model answer
Growth is the expansion of a business in terms of sales, market share, or scale of operations.
- 4
Define survival as a business objective.
Model answer
Survival is the objective of continuing to operate, particularly important for new businesses or during periods of economic difficulty.
- 5
What does cash flow mean as a business objective?
Model answer
Cash flow as an objective involves ensuring sufficient liquid funds are available to meet day-to-day financial obligations.
- 6
What are social objectives in business?
Model answer
Social objectives are business aims that benefit society, such as providing employment or supporting local communities.
What is inside Levo
Six ways to work the same material.
What Is Business? revision questions
- Is What Is Business? examined at AS in AQA Business?
- Yes. It sits in Papers 1, 2 and 3, which you take in the first year, so it is on the AS paper as well as counting towards the full A level.
- What does What Is Business? cover in AQA AS-Level Business?
- 8 subtopics: why businesses exist and their objectives, revenue, costs and profit, calculating and presenting business data, business forms, sectors and liability, share capital, market capitalisation and dividends, what moves a share price, and how ownership shapes objectives, competition, market conditions and incomes and interest rates, demographics and environmental issues. Each one has its own page with questions and model answers.
- How is What Is Business? organised?
- By the AQA 7132 specification, subtopic by subtopic, so it matches the order you are taught it in.
Every question in What Is Business?, on a schedule.
Attempt a question from memory, write the correct version, then attempt it again. Levo records the jump between your first attempt and your last, and brings each question back on the day you are due to forget it.
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