1

Question 1

Cash flow

Answer 1

The money that flows into and out of a business over a given time period. Cash flow needs to be sufficient as cash is needed to pay bills.

Question 2

Demographic

Answer 2

the size and structure of the population including features like age profile gender and ethnic makeup.

Question 3

Dividence

Answer 3

portion of the profits of the firm given to shareholders.

Question 4

Ethical

Answer 4

Moraly correct behaviour

Question 5

Fair trade

Answer 5

Buying raw materials at a price that allows a reasonable standard of living for the suppliers and often above at the market price.

Question 6

Growth

Answer 6

increase over time of the revenue of a business. Economic growth refers to the increase in size of the whole economy i.e. the sales of all the businesses in a nation.

Question 7

Intrest rate

Answer 7

is the cost of borrowing money and return for lending money. Borrowers have to pay back the original amount PLUS a charge for borrowing the money

Question 8

Limited liability

Answer 8

Shareholders can only lose the money invested in the company not their entire personal wealth if the business collapses with debts. Limited liability is shown by either Ltd or plc

Question 9

Market capitalisation

Answer 9

value of a company as measures by the stock market.

Market Capitalisation = Number of shares x share price

Question 10

Market conditions

Answer 10

How confident and well-off customers are feeling and the number and strength of competitors. Both consumers and rivals affect sales

Question 11

Mission

Answer 11

main purpose of the organisation.

Question 12

Mutals

Answer 12

An organisation whose members who collectively own the business and are
also its customers. There are no shareholders E.g. Building Societies

Question 13

Non profit organisations

Answer 13

An incorporated organization which exists for the interests of its members or as a charity, so there are no shareholders only trustees benefit financially. E.G. Kimbolton School

Question 14

Objective

Answer 14

Short –term specific measurable target. E.g. 1m sales next month

Question 15

Ordianary share capital

Answer 15

the amount of money invested into the business by the shareholders. The shareholders cannot reclaim their money from the firm, but can sell their shares to another party.

Question 16

Private limited company

Answer 16

A limited liability business where shares are not freely available for sale, decisions can be made by the owners. They are usually small or medium sized firms but there are exceptions e.g. Virgin

Question 17

Private sector

Answer 17

Any organisation that is not government run or owned.

Question 18

Profit

Answer 18

is the difference between a firm’s revenues from its trading activities and its total costs. It is a reward for risk and a return on capital invested.
PROFIT = TOTAL REVENUE – TOTAL COST

Question 19

PUBLIC SECTOR ORGANISATIONS

Answer 19

Government-owned organisations.

Question 20

Public limited company

Answer 20

Large firm whose shares can be bought and sold by the general public on the Stock Exchange. The owners appoint managers to run the business.

Question 21

Revenue

Answer 21

income generated by sales of a product. Also known as sales revenue or sales value REVENUE = PRICE x QUANTITY

Question 22

Share

Answer 22

certificate indicating part ownership of a company. The share entitles the holder to receive dividends and voting rights to affect the way the firm is run.

Question 23

Shareholder

Answer 23

Part-owners of a business who can vote at the AGM and receive dividends.

Question 24

Social goal

Answer 24

an aim of benefiting the community, environment or some external stakeholder. Social goals are considered ethical and may involve a sacrifice of profit.

Question 25

Sole trader

Answer 25

An individual who owns and runs a business. S/he operates under unlimited liability so are personally responsible for all business debts.