2.1 business Flashcards
Growth
an increase in the size of the business
Internal (organic) growth
a business expands using its own resources
External (inorganic) growth
a business expands by joining with another business
New products
goods and services being made by the firm for the first time
New markets
markets being targeted by the firm for the first time
innovation
developing a new product
Research and development
when a business investigates how to apply latest scientific and technological improvements to create new or better products
merger
when a business investigates how to apply latest scientific and technological improvements to create new or better products
Takeover
one firm buys another
finance change
the amount of funds (money) a business has to support its activity
Retained profit
the amount of past profit not distributed (given back) to owners eg as shareholder dividends but rather kept back by the business as ‘savings’
Sources of finance
the origin of money a business has to fund business activity
Internal sources of finance
funds raised within the business by selling assets or using retained profits
Private limited company (Ltd)
a company whose shares cannot be advertised for sale, or sold without the agreement of other shareholders
public limited company (PLC)
a company whose shares can be bought and sold by anyone on a stock market
Stock exchange
The place where company shares are bought and sold
Stock market flotation
the process of becoming a PLC and selling shares on the stock exchange
Loan capital
money lent to a business by a bank for a fixed period which must be repaid with interest
Share capital
money raised by a company by selling new shares giving part-ownership to shareholders.
