Aragón PAU Business and Business Model Design cheat sheet

Company = organised set of productive factors (labour, capital, technology) directed by management toward goods or services exchanged in a market, with risk borne by the owner.

Legal classifications: sole trader (empresario individual, unlimited liability), sociedad anónima (capital divided into shares, minimum 60,000 EUR), sociedad limitada (minimum 3,000 EUR, restricted transfer).

Functional areas: production, marketing, finance/investment, human resources, administration - each area converts inputs into value and reports to general management.

Opportunity cost of a decision = value of the best alternative forgone; it is not an accounting cost and never appears in the books.

Sector classification: primary (extraction), secondary (manufacturing/construction), tertiary (services); in Spain services generate roughly two thirds of GDP and employment.

Economic environment indicators: GDP growth, inflation (IPC), unemployment (EPA survey), interest rates (Euribor), exchange rate; each shifts demand or cost for the firm.

Business cycle phases: expansion, peak, recession, trough; cyclical sectors (construction, durables) amplify the cycle, defensive sectors (food, utilities) dampen it.

Stakeholders: shareholders (residual claim), employees, customers, suppliers, creditors, public administrations, local community; objectives may conflict.

Value added = sales revenue − intermediate consumption; it measures the wealth the company itself creates and is the base of GDP aggregation.

Porter's five forces: rivalry among existing competitors, threat of new entrants, threat of substitutes, bargaining power of buyers, bargaining power of suppliers.

Generic strategies (Porter): cost leadership, differentiation, focus (cost focus or differentiation focus); being 'stuck in the middle' destroys profitability.

SWOT = internal strengths and weaknesses plus external opportunities and threats; the internal part is controllable, the external part is not.

Ansoff matrix: market penetration (existing product/market), product development, market development, diversification (highest risk).

BCG matrix: stars (high growth, high share), cash cows (low growth, high share, fund others), question marks, dogs (candidates for divestment).

Growth routes: internal (reinvestment), external (merger, acquisition, joint venture), and internationalisation; each trades control against speed and cost.

Product life cycle: introduction, growth, maturity, decline; pricing and promotion mix must change with the stage.

Break-even point (units) = fixed costs ÷ (unit price − unit variable cost); margin of safety = (actual sales − break-even sales) ÷ actual sales.

Marketing mix 4P: product, price, place, promotion; price strategies include skimming, penetration, cost-plus and psychological pricing.

Business Model Canvas nine blocks: customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, cost structure.

Business model = how a firm creates value (value proposition), delivers it (value chain and partners) and captures it (revenue model and cost structure).

Revenue models: sale of goods, subscription, freemium, pay-per-use, licensing, advertising, brokerage/commission, leasing.

Value proposition must state the customer's job-to-be-done, the pain relieved and the gain created - not the product's technical features.

Disruptive innovation (Christensen): an entrant starts at the low end or in a new market with a simpler, cheaper offer and moves upmarket as incumbents overshoot.

Lean startup cycle: build–measure–learn; minimum viable product tests the riskiest assumption before scaling investment.

Open innovation: ideas flow in and out of firm boundaries; sources include users, suppliers, universities, spin-offs and licensing.

Digital platform models rely on network effects: value to each user rises with the number of users on the other side (cross-side network effect).

Innovation types by degree: incremental (improve existing), radical (new technology or market), architectural (recombine existing components).

Balance sheet identity: Assets = Liabilities + Equity; current items are those with a horizon of one year or less.

Working capital = current assets − current liabilities; a positive figure signals liquidity buffer, a persistent negative one signals tension.

Ratios: liquidity = current assets ÷ current liabilities; solvency = (equity + non-current liabilities) ÷ total assets; debt ratio = liabilities ÷ total assets.

Profitability: ROA = net profit ÷ total assets; ROE = net profit ÷ equity; economic profitability uses EBIT ÷ invested capital.

Income statement order: revenue − variable costs = contribution margin; − fixed costs = EBITDA; − depreciation = EBIT; − interest = EBT; − tax = net profit.

Payback = years until cumulative cash flows recover the initial investment; it ignores cash flows after that point and the time value of money.

NPV = Σ CFt ÷ (1+k)^t − initial investment; accept when NPV > 0. IRR is the rate making NPV = 0; accept when IRR > k.

Amortisation methods: linear (constant annual charge), degressive (constant rate on residual value), and sum-of-digits; each changes annual profit but not total.

Cash flow statement separates operating, investing and financing flows; a profitable firm can still fail if operating cash flow is negative.

Legal forms and liability: sole trader and general partnership expose personal assets; the S.A. and S.L. limit liability to contributed capital.

S.A. minimum capital 60,000 EUR, at least 25% paid up at incorporation; S.L. minimum 3,000 EUR fully paid at incorporation.

Incorporation requires a public deed before a notary and registration in the Registro Mercantil; legal personality begins on registration.

Company bodies: shareholders' general meeting (approves accounts, appoints directors, amends bylaws) and administrators/board (management and representation).

Directors' duties: diligence, loyalty, avoid conflicts of interest, and business judgement rule protection for informed decisions.

Insolvency (concurso de acreedores): debtor must file within two months of knowing it is insolvent; directors who fail can be personally liable.

Employment framework: Estatuto de los Trabajadores governs contracts, working time, dismissal; collective bargaining agreements set sector conditions.

Consumer protection: right of withdrawal of 14 calendar days in distance and off-premises contracts, plus mandatory two-year legal guarantee on goods.

Competition law (Ley de Defensa de la Competencia, EU Articles 101-102): prohibits cartels, abuse of dominance, and requires merger control above thresholds.