28 Terms Flashcards
Dividends
The part of profits that are given to shareholders
Ethical
Morally correct behaviour
Fair Trade
Buying raw materials at a price that allows supplies to have a reasonable standard of living
Company Growth
The increase of revenue in a business
Limited liability
Shareholders can only lose money invested in the company
Market capitalisation
Market capitalisation = number of shares x share price
Mission
The main purpose of an organisation
Non-profit organisations
Incorporated organisations that have the purpose of servicing and helping society
Objective
Short term goal e.g. 1 mil sales next month
Private limited company
An LL business where shares are not freely available for sale and the owners can make decisions
Private sector
Any organisation that is not run by government
Profit
The diff between a firms revenue and total costs, a “reward” for risk and a return on capital invested
Profit formula
Profit = revenue - costs
Public sector organisations
Government owned organisations
Public limited companies
Large firm, shares can be bought and sold by the general public on the stock exchange. Owners appoint managed to run the business
Revenue
The income generated by sales of a product
Revenue formula
Rev = price x quantity sold
Share
Certificate indicating part ownership of a company and voting rights on how things are run
Shareholder
Part-owners of a business who can vote and receive dividends
Sole trader
An individual who runs a business. Operates under UL
Business
An organisation that exists to provide goods and services
The transformation process
Describes what happens inside the business. This is where value is added to inputs to create outputs
Cell
Capital, Enterprise, land, labour
Added value formula
AV = selling price - cost of bought in materials, components and services
Smart
Specific, measurable, achievable, relevant, time bound
Fixed costs
Costs that do not change directly with level of output
Variable costs
Change directly with output. Increases by set amount each time new unit is made
Total costs formula
Total cost = fixed costs + variable Costs
