Some Basic Business Questions

[MikeG]

Hello There;

As you can see, Im a very new member here;

I'm final year Aerospace Engineering student, in Bath university, as you perhaps understand, I have absolutely no business background but I have been given a business in engineering work to hand in.

I would be greatfull if you guys could help me with some of the basic questions. (If its against the forum's rule, I do apologies and feel free to close this topic)

some of the question Im stuck on:

- By What ratio does a business with shareholders judge the adequency of its financial performance.

- How 'Capital Employed' is funded.

- Three types of cost associated with running a business.

I do appreciate any help :)

[Cornish Steve]

Mike,

I'll take a shot, but you'd be best served by searching for some of these terms over the Internet for more precise or in-depth explanations.

By What ratio does a business with shareholders judge the adequency of its financial performance.
Several ratios are used: Return on Equity, Return on Assets are two examples. Other measures, such as EBITDA, are frequently used to assess performance.

How 'Capital Employed' is funded.
By debt or equity. Accountants can calculate the best debt/equity ratio for a business.

Three types of cost associated with running a business.
For business planning, fixed costs and variable costs are very important. Interest charges on debt would be a third.

I hope this helps.

[clairemackaness]

I cant answer any of your questions, but I can say that during my day job (working for the Learning and Skills Council) I am currently developing an initiative at Southend Airport, based on Aeronautical qualifications. I am therefore in touch with quite a few aeronautical engineering companies. If you wanted to pick the owners brains, then I could always put you in touch with them.

[Steve Roberts]

Hello There;

As you can see, Im a very new member here;

I'm final year Aerospace Engineering student, in Bath university, as you perhaps understand, I have absolutely no business background but I have been given a business in engineering work to hand in.

I would be greatfull if you guys could help me with some of the basic questions. (If its against the forum's rule, I do apologies and feel free to close this topic)

some of the question Im stuck on:

- By What ratio does a business with shareholders judge the adequency of its financial performance.

- How 'Capital Employed' is funded.

- Three types of cost associated with running a business.

I do appreciate any help :)

Take this the right way but your questions are worded rather strangely! Anyway:

A shareholder will be interested in their return on investment. This is primarily from two things:

Profit - a proportion of which will be paid to the shareholders by way of a dividend.

Capital Gain - if a company is growing then the value of the company is growing, therefore the shares will be worth more when the shareholder sells them.

Regarding the cost of running a business, this will depend on what sector the buiness is in. In the case of engineering, I guess the costs will include: Plant & Equipment, engineers' salaries, premises, raw material, sales & marketing costs, administrative overheads - etc..

[MikeG]

Thanks Guys;

I appreciate all your helps.

@claire;

Thanks for the offer, but I am planning to continue my degree in US, Im already doing a part time job for BA. But thannks anyway for the offer.

@Steve;
I appreciate what saying; but it was word by word copy from handout. I don't have any background in business whatsoever so it doesn't make any sense for me anyways.


@goldctrsteve; Thanks mate I used them anyway.

Appreciate your helps.