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Understanding business performance
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Businesses use numbers from graphs, accounts and markets to make decisions. You need to read the data and judge how far to trust it.
Types of data
Graphs and charts: show trends, such as sales rising over time.
Financial data: revenue, costs, profit, margins and cash flow.
Marketing data: results of market research, such as customer surveys.
Market data: market size, market share, changes in costs and prices.
Financial data: revenue, costs, profit, margins and cash flow.
Marketing data: results of market research, such as customer surveys.
Market data: market size, market share, changes in costs and prices.
Useful calculations
Percentage change = (new − old) ÷ old × 100
Market share (%) = business's sales ÷ total market sales × 100
Example: sales rise from £40 000 to £50 000. Change = 10 000 ÷ 40 000 × 100 = 25%.
Market share (%) = business's sales ÷ total market sales × 100
Example: sales rise from £40 000 to £50 000. Change = 10 000 ÷ 40 000 × 100 = 25%.
Limitations of financial information
It shows the past, not the future.
It does not show qualitative factors, such as staff morale or reputation.
Figures may be affected by one-off events, and comparisons need similar businesses.
It does not show qualitative factors, such as staff morale or reputation.
Figures may be affected by one-off events, and comparisons need similar businesses.
A business sells £3 million in a market worth £20 million. What is its market share?
- Market share = 3 ÷ 20 × 100
Answer: 15%
Use graphs, financial, marketing and market data to support decisions. Percentage change = (new − old) ÷ old × 100. Market share = own sales ÷ market sales × 100. Financial data is historical and ignores qualitative factors.
Check you have got it
Answer 6 quick questions with instant marking. If you get one wrong, GCSE-ready shows you why and gives you another go. It is free, and you do not need an account.