CLASSIFICATION OF BUSINESS

3. CLASSIFICATION OF BUSINESS Let’s start with the first set of slides

CLASSIFICATION BY PURPOSE For-profit A business whose goal is to make a profit by supplying goods and services

Profit = Revenue - Expense WHAT IS PROFIT? Profit: the difference between expenses (costs) and revenue (sales) Profit = Revenue - Expense

Profit = Revenue - Expense WHAT IS THE PROFIT? Profit = Revenue - Expense Yipin has made $100 by selling lemonade. It cost him $25 to make the lemonade. What is his profit? $ 75 = $ 100 - $25

CLASSIFICATION BY PURPOSE Non-profit A group that does not seek profit but raises funds for a specific goal

CLASSIFICATION BY SIZE Small: < 99 employees Medium: 100 – 499 employees Large: > 500 employees http://www.statcan.gc.ca/pub/11f0027m/2011069/part-partie1-eng.htm

CLASSIFICATION BY OWNERSHIP Sole proprietorship Partnership Corporation Franchise cooperative

CLASSIFICATION BY INDUSTRY Primary: industry that obtains and provides natural and raw materials Secondary: industry that converts the raw materials into commodities and products Tertiary: industry that provides commodities and products to consumers

4. EXERCISE QUESTIONS

Read the information sheet for each company, and classify the company by purpose, size, ownership, and industry.