Pūtake
What does pūtake mean in a business context?
Pūtake refers to the core purpose or reason a business exists. It could be to make profit, serve the community, solve a problem, or promote sustainability.
Name two internal factors that influence the price of a product.
What is the purpose of an income statement?
An income statement shows a business’s financial performance over a specific period (usually monthly, quarterly, or annually). It details the revenue earned, expenses incurred, and the resulting profit or loss. This helps owners, managers, and stakeholders assess whether the business is making money and where improvements can be made.
What is the break-even point?
The break-even point is the level of sales at which a business covers all its costs—no profit, no loss. It’s a critical figure for planning and decision-making, especially for new businesses.
Who are internal stakeholders?
People directly involved in the business:
Give an example of a business with a social pūtake.
A business like Eat My Lunch aims to provide meals to children in need while selling lunches to paying customers. Its pūtake is both commercial and social.
Name two external factors that influence price.
What is the formula for calculating net profit?
Net Profit = Revenue – Expenses
Revenue includes all income from sales and services. Expenses include costs like wages, rent, utilities, and materials. The result shows whether the business is financially successful during that period.
What are fixed costs?
Fixed costs are expenses that do not change with the level of production or sales. Examples include rent, salaries, insurance, and loan repayments. These must be paid regardless of how much the business produces or sells.
Who are external stakeholders?
People or groups outside the business who are affected by its operations:
How does a business’s pūtake influence its goals and operations?
The pūtake shapes decisions, culture, and priorities. A profit-driven business may focus on efficiency and growth, while a socially-driven one may prioritise community impact and ethical practices.
How does high demand affect the price of a product?
When demand is high and supply is limited, businesses can increase prices because customers are willing to pay more. This is common with trending or seasonal products.
If a business earns $10,000 in revenue and has $7,000 in expenses, what is its net profit?
Net Profit = $10,000 – $7,000 = $3,000
This means the business made a profit of $3,000 during that period.
A business has fixed costs of $2,000, sells a product for $50, and has variable costs of $30 per unit. What is the break-even point in units?
Break-even point = Fixed Costs ÷ (Selling Price – Variable Cost)
= $2,000 ÷ ($50 – $30) = 100 units
The business must sell 100 units to cover all costs.
How can employees influence a business’s success?
Motivated and skilled employees improve productivity, customer service, and innovation. Poor morale or high turnover can harm performance and reputation.
Can a business have both profit and social pūtake? Explain.
Yes. Many businesses aim to be financially sustainable while making a positive impact. This is common in social enterprises and B Corporations.
Why might a business lower its price during a sale?
What does it mean if a business has a negative net profit?
It means the business has made a loss—its expenses were greater than its revenue. This could be due to high operating costs, low sales, or unexpected expenses. It signals the need for review and possible changes in operations.
What happens to the break-even point if variable costs increase?
If variable costs increase, the contribution margin (selling price – variable cost) decreases, meaning the business must sell more units to break even. This makes it harder to reach profitability.
What might happen if a business ignores customer feedback?
Customers may feel undervalued and switch to competitors. This can lead to declining sales, negative reviews, and damage to the brand.
How might a change in pūtake affect stakeholder relationships?
Stakeholders may react positively or negatively. For example, shifting to eco-friendly practices may please customers and communities but increase costs, affecting shareholders. Clear communication is key.
How can branding influence the price a business charges?
Strong branding creates perceived value, allowing businesses to charge premium prices. Customers may pay more for trusted, high-quality, or status-associated brands (e.g., Apple, Nike).
How can analysing an income statement help a business make strategic decisions?
By reviewing income statements, businesses can identify trends in revenue and expenses, spot areas of overspending, and make informed decisions about pricing, staffing, and budgeting. It also helps in setting financial goals and evaluating performance against targets.
Why might a business operate below its break-even point temporarily?
A business might do this to:
How can a business balance the conflicting interests of shareholders and employees?
By: