Business edexcel igcse Flashcards
above-the-line promotion
Placing adverts using the media
accounts clerk
A person who keeps records or accounts in an office
acid test ratio
Similar to the current ratio but excludes stocks from current assets (sometimes called the quick ratio)
adjustments
Includes adjustments for the profits made on the disposal of assets
advertising
Communication between a business and its customers where messages are placed in the media to encourage the purchase of products
agent or broker
Intermediary that brings together buyers and sellers
anti-competitive practices (restrictive trade practices)
Attempts by firms to prevent or restrict competition
apprenticeship
System of training new entrants to a trade or profession, often, but not always, younger workers, mostly on-the-job training but often with some college attendance
arrears
Money that you owe someone, or is owed to you, because you have not made, or have received, regular payments at the correct intervals or amounts
assembly plant
Factory where parts are put together to make a finished product
assets
Resources used or owned by a business, such as cash, stock, machinery, tools, and equipment
assisted areas
Areas that are designated by a government as having economic problems and are targeted to receive support in a variety of forms
audit
Official examination of a company’s financial records in order to check that they are correct
auditing
Accounting procedure that checks thoroughly the accuracy of a company’s accounts
automation
Use of computers and machines instead of people to do a job
automotive
Relating to cars
balance of trade (or visible balance)
Difference between visible exports and visible imports
bank overdraft
Agreement with a bank where a business spends more money than it has in its account (up to an agreed limit)
barriers to entry
Restrictions that mean it is difficult for new firms to enter a market
batch production
Method that involves completing one operation at a time on all units before performing the next
below-the-line promotion
Any promotion that does not involve using the media
bid
Offer to pay a particular price for something (for example, a business)
bonus systems
Payment in addition to the basic wage for reaching targets or in recognition for service
Boston matrix
2x2 matrix that describes products according to the market share they enjoy and whether the market has any potential for growth
break-even chart
Graph that shows total cost and total revenue; break-even point is where total cost and total revenue intersect
break-even point
Level of output where total costs and total revenue are exactly the same: neither a profit nor a loss is made
brownfield sites
Areas of land that were once used for urban development
budget
An official statement that a government makes about how much it intends to spend and what the rates of taxes will be for the next year or six months
budgetary measures
Actions taken by the government to influence business and the economy
bulk breaking
Dividing a large quantity of goods received from a supplier before selling them on in smaller quantities to customers
bulk buying
Buying goods in large quantities, which is usually cheaper than buying in small quantities
business organisation
An organisation that produces goods and services
business to consumers (B2C)
Selling of goods by businesses to consumers
capital employed
Amount of money invested in a business
capital finance
Finance provided by the owners of a business
capital-intensive production
Production methods that make more use of machinery relative to labour
capital-intensive
Use of relatively more machinery than labour in production
cash flow
Flow of money into and out of a business
cash flow forecast
Prediction of all expected receipts and expenses of a business over a future time period, which shows the expected cash balance at the end of each month
cash inflow
Flow of money into a business
cash outflow
Flow of money out of a business
centralised
Type of organisation system where most decisions are made at the top of the organisation and then passed down the chain of command
certificate of incorporation
Document needed before a new company can start doing business
chairperson
Someone who is in charge of a meeting or directs the work of a committee or organisation
charities
Organisations that give money, goods or help to people who are poor, sick or in need
closing cash balance
Amount of cash that the business expects to have at the end of each month (takes into account the cash inflows and cash outflows)
commission
Extra amount of money that is paid to a person or organisation according to the value of the goods they have sold or the services they have provided
commission payment
Payment based on the value of sales, usually a percentage of sales made
commodities
Products that are bought and sold (in business often refers to things like oil, gold, iron ore, rice, wheat and meat)
communication channels
Routes along which information might travel in a business
competition-based pricing
Pricing strategies based on the prices charged by rivals
computer aided design (CAD)
Use of computers to design products
computer aided manufacturing (CAM)
Where computers link and control the design and production of goods in manufacturing
computer integrated manufacturing (CIM)
Use of computers to control the entire production process
computer numerically controlled machines (CNCs)
Machines that carry out the instructions fed by computers
consumer cooperative
Cooperative that is owned by its customers
consumer goods
Goods and services sold to ordinary people (consumers) rather than businesses
consumer panels
Groups of customers are asked for feedback about products over a set period
contracts of employment
Written agreements between an employer and an employee in which each has certain obligations
cooperative
Company, factory or organisation in which all the people working there own an equal share of it
cost plus or cost-based pricing
Adding a percentage (the mark-up) to the costs of producing a product to get the price
costs
Expenses that must be met when setting up and running a business
coupons
Printed piece of paper given to customers by the seller of a product, allowing the customer to pay less than usual for the product when they next buy it, or to get a free gift
crowd funding
Where a large number of individuals (the crowd) invest in a business venture using an online platform and therefore avoiding using a bank
currency reserves
Money in foreign currency held by a country and used to support its own currency and to pay for imports and foreign
current assets
Assets likely to be changed into cash within a year
current liabilities
Debts that have to be repaid within a year
current ratio
Assesses the firm’s liquidity by dividing current liabilities into current assets
de-industrialisation
Decline in manufacturing
debenture
Long-term security yielding a fixed rate of interest, issued by a company and secured against assets
decentralised
Type of organisation system where decision making is pushed down the chain of command and away from the top
deed of partnership
Binding legal document that states the formal rights of partners
demographic segmentation
Dividing a market according to the type of people that make up a particular group, in particular their age, sex and income
design brief
Set of instructions about what a new product should look like or what features it should have
destroyer or predatory pricing
Setting a low price until rivals have gone out of business
direct mail
Advertisements that are sent to people in the post, often people who have been chosen because they might be interested in the product
direct selling
Where businesses sell their products directly to consumers
diseconomies of scale
Rising average costs when a firm becomes too big
distributed profit
Profit that is returned to the owners of a business
distribution channel
Route taken by a product from the producer to the customer
diversify
If a business, company or country diversifies, it increases the range of goods or services it produces
dividends
Share of the profit paid to shareholders in a company
division of labour
Specialisation in specific tasks or skills by an individual
downsizing
Process of reducing capacity, usually by laying off staff
downturn
Period or process in which business activity, production, etc. is reduced and conditions become worse
downward communication
Passing messages from the top of the organisation to those at the bottom
drawings
Money taken out of the business by the owner for personal use
dumping
Where a business sells goods in another country often below cost
e-commerce or e-tailing
Use of electronic systems to sell goods and services
early adopters
Consumers who are keen to buy new products as soon as they are launched
economies of scale
Financial advantages (falling average costs) of producing something in very large quantities
emerging economies
Rapidly growing economies (for example, Brazil) - emerging economies have huge growth potential but also pose significant risks
employment tribunal
Court that deals with cases involving disputes between employers and employees
enterprise
The activity of starting and running businesses
entrepreneur
Person who takes risks and sets up businesses; individual who organises the other factors of production and risks their own money in a business venture
exchange rate
Value of one currency in terms of another
excise duties
Taxes on selected goods, such as those on petrol and tobacco in the UK
Market research
Collection, presentation, and analysis of information relating to the marketing and consumption of goods and services
Market segments
Part of a whole market where a particular customer group has similar characteristics
Market
Set of arrangements that allows buyers and sellers to communicate and trade in goods and services
Market share
Proportion of sales in a total market that a business or product enjoys
Marketing
Identifying customer needs and satisfying them profitably
Marketing mix
Elements of a firm’s marketing that are designed to meet the needs of customers (often called the 4Ps: product, price, promotion, place)
Maslow’s hierarchy of needs
Order of people’s needs, starting with basic human needs
Mass markets
Very large markets in which products with mass appeal are marketed
Merchandise
Goods that are being sold
Merchandising
Way in which goods are arranged and placed in a store
Merger
Two or more businesses joining together to form one new firm
Minimum wage
Minimum amount per hour that most workers are entitled to be paid
Monetary policy
Using changes in interest rates and the money supply to manage the economy
Monetary system
System of money in a country or the world, controlled by governments and central banks
Mortgage
Long-term loan secured with property
Motivators (Herzberg’s)
Things at work that result in satisfaction
Multinational company
Large business with significant operations in at least two different countries
Natural monopoly
Market where it’s more efficient to have just one organization meeting total market demand
Net assets
Value of all assets less liabilities; total at the bottom of the first part of the balance sheet
Net cash flow
Difference between cash flowing in and out of a business in a given time period
Net current assets
Current assets minus current liabilities, also known as working capital
Net pay
Take-home pay after deductions like taxes and contributions
Niche market
Smaller market, usually within a large market or industry
Non-current assets
Assets that last for more than one year
Non-current liabilities
Debts that are payable after 12 months
Normal profit
Minimum profit needed to retain the interest of the owners
Objectives
Goals or targets set by a business
Off-the-job training
Training that takes place away from the work area
Ombudsman
Someone who deals with complaints made by ordinary people against the government, banks, insurance companies, and so on
On-the-job training
Training that takes place while doing the job
Operating profit
Gross profit less expenses
Operating profit margin
Operating profit expressed as a percentage of turnover
Organisation
Group, such as a club or business, that has formed for a particular purpose
Organisational chart
Diagram that shows the different job roles in a business and how they relate to each other
Outcompeted
Perform more effectively in a particular field
Output
Amount of goods or work produced by a person, machine, or factory
Outsourcing
Contracting out of work that might otherwise have been performed within the organisation to other businesses
Overdue
Money that has not been paid by the time expected
Overheads
Money spent regularly on rent, insurance, electricity, and other things that are needed to keep a business operating
Overtime
Rate of pay above the normal rate to compensate employees for working extra hours
Overtrading
Taking on more work than a business can afford to fund effectively
Partnership
Business owned by between 2 and 20 people
Patents
Legal documents giving a person or company the right to make or sell a new invention, product, or method of doing something and stating that no other person or company is allowed to do this
Payroll officer
Someone who is responsible for the administration of workers’ pay in an organisation
Penetration pricing
Setting a low price to start with in order to get established in the market; price may be raised once established
Performance-related pay
Payment system designed for non-manual workers where pay increases are given if performance targets are met
Pharmaceutical
Relating to the production of drugs and medicines
Piece rate
Payment system where workers receive an amount of money for each unit produced
Portfolio
Collection (of business interests or products)
Predator
Business that tries to use another’s weakness to get advantages
Premises
Buildings and land used by a shop or business
Primary or field research
Gathering of ‘new’ information that does not already exist
Primary sector (industry)
Production involving the extraction of raw materials from the earth
Private limited company (Ltd)
In the UK, a private company limited by shares, meaning the liability of shareholders to creditors is limited to the capital originally invested
Private sector
Business organisations owned by individuals or groups of individuals
Privatisation
Transfer of public sector resources to the private sector
Process production
Form of flow production where materials pass through a plant where a series of processes are carried out in order to change the product
Producer goods
Goods and services produced by one business for another
Product development
Identifying opportunities and ideas for new products and converting those ideas into marketable goods or services
Product life cycle
Level of sales at the different stages through which a product passes over time
Product orientation
Where a business focuses on the design and manufacture of the product itself rather than the needs of customers
Product portfolio (product mix)
Range of products a business is currently marketing
Product positioning
Way that people think about a product in relation to the company’s other products and to competing products, or the way that the company would like them to think about it
Production
Transformation of resources into a final product
Productivity
Rate at which goods are produced, and the amount produced, especially in relation to the work, time, and money needed to produce them
Profit maximisation
Making as much profit as possible in a given time period
Profit
Money left over after all costs have been subtracted from revenue
Profit satisficing
Making enough profit to satisfy the needs of the business owner(s)
Prospectus
Document produced by a company that wants the public to buy its shares
Protectionism
Use of trade barriers to protect domestic producers
Public corporations
Business organisations owned and controlled by the state/government
Public limited company (Plc)
In the UK, a limited company whose shares are freely sold and traded, with a minimum share capital of £50,000
Public relations
Attempt by a business to communicate with interested parties
Public sector
Business organisations owned by central or local government
Qualitative data
Information about attitudes, beliefs, and intentions, usually written in words
Quality
Features of a product that allow it to satisfy customers’ needs
Quality assurance
Working methods that take into account customers’ wants when standardising quality
Quality circles
Small group of factory workers who meet regularly to discuss ways to improve working methods and to solve problems
What is a limited company?
A limited company whose shares are freely sold and traded, with a minimum share capital of £50,000.
What is public relations?
Attempt by a business to communicate with interested parties.
What is the public sector?
Business organisations owned by central or local government.
What is qualitative data?
Information about attitudes, beliefs, and intentions, usually written in words.
What is quality?
Features of a product that allow it to satisfy customers’ needs.
What is quality assurance?
Working methods that take into account customers’ wants when standardising quality.
What are quality circles?
Small group of factory workers who meet regularly to discuss ways to improve working methods and to solve problems.
What is quality control?
Making sure that the quality of a product meets specified quality standards.
What is quantitative data?
Information that can be quantified, that is, expressed in numbers.
What is quantitative information?
Information expressed in numbers.
What is a quota?
Physical limit on the quantity of imports allowed into a country.
What is ratio analysis?
Mathematical approach to investigating accounts by comparing two related figures.
What is redeployment?
Moving someone or something to a different place or job.
What is regulatory control?
Official power to control an activity and to make sure that it is done in a satisfactory way.
What is remuneration?
Money paid to employees for their work or services.
What is repatriation of profit?
Where a multinational returns the profits from an overseas venture to the country where it is based.
What does it mean to repossess?
To take back cars, furniture, or property from people who had arranged to pay for them over a long time but cannot continue to pay for them.
What is a retail cooperative?
Cooperative of retail members, who often work together to assert their purchasing power.
What are retailers?
Businesses that buy goods from manufacturers and wholesalers and sell them in smaller quantities to consumers.
What is retained profit?
Profit held by a business rather than returning it to the owners and which may be used in the future.
What is return on capital employed (ROCE)?
Profit of a business as a percentage of the total amount of money used to generate it.
What is revenue?
Money from the sale of goods and services.
What is a rights issue?
Sale of new shares to existing shareholders at a discount.
What is a salary?
Pay, usually to non-manual workers, expressed as a yearly figure but paid monthly.
What is a sample?
Small group of people, which must represent a proportion of a total market when carrying out market research.
What does it mean to saturate a market?
To offer so much of a product for sale that there is more than people want to buy.
What is scale in business?
Size of a business.
What are scarce resources?
With limited availability.
What is secondary or desk research?
Collection of data that already exists.
What is the secondary sector?
Production involving the conversion of raw materials into finished and semi-finished goods.
What are services?
Non-physical products, such as banking, car washing, and waste disposal.
Who are shareholders?
Owners of limited companies.
What is short-term finance?
Money borrowed for one year or less.
What is skimming (or creaming)?
Setting a high price initially and then lowering it later.
What is a small business?
A business that employs fewer than 50 people.
What is a social enterprise?
Business that aims to improve human or environmental well-being, such as charities.
What are social security payments?
Money taken by the British government from people’s wages to pay for the system of payments to people who are unemployed or ill.
What are socio-economic groups?
Division of people according to social class based on employment status.
What is a sole trader?
Business owned by a single person.
What is span of control?
Number of people a person is directly responsible for in a business.
What is a stakeholder?
Individual or group with an interest in the operation of a business.
What is a statement of comprehensive income?
Financial document showing a firm’s income and expenditure in a particular time period.
What is a statement of financial position?
Summary at a point in time of business assets, liabilities, and capital (often called the balance sheet).
What is the stock market?
Market for shares in PLCs.
What is a stockpile?
Large supply of goods and so forth that are being kept for use or possible use in the future.
What is subscription pricing?
Amount of money you pay regularly to receive a newspaper, magazine, or broadcasting or telephone service.
What does it mean to subsidise?
Paying part of the costs (often by the government in business).
What is a subsidy?
Financial support given to a domestic producer to help compete with overseas firms.
What is a surplus?
Amount of something that is more than what is needed or used.
What is sustainable development?
Idea that people should satisfy their basic needs and enjoy improved living standards without compromising the quality of life of future generations.
What is tailor-made?
Where a product has been designed so that it is exactly right for someone’s needs.
What is a tariff?
Tax on imports to make them more expensive.
What are tax allowances?
Part of income that is not taxed.
What is the tertiary sector?
Production of services in the economy.
What is a time rate?
Payment system based on the amount of time employees spend at work.
What are total costs?
Fixed cost and variable cost added together.
What is total quality management (TQM)?
Managerial approach that focuses on quality and aims to improve the effectiveness, flexibility, and competitiveness of the business.
What is total revenue?
Money generated from the sale of output. It is price multiplied by quantity.
What are trade barriers?
Measures designed to restrict trade.
What is a trade bloc?
Group of countries situated in the same region that join together and enjoy trade free of barriers.
What are trade payables?
Buying resources from suppliers, such as raw materials and components, and paying for them at a later date.
What are trade receivables?
Amounts of money that are owed to a company by its customers.
What are trade unions?
Organisations, usually in a particular trade or profession, that represent workers, especially in meetings with employers.
What is training?
Process that involves increasing the knowledge and skills of a worker to enable them to do their job more effectively.
What are transactions?
Business deals or actions, such as buying or selling something.
What does it mean to be undercapitalised?
Starting a business with insufficient capital.
What is unfair dismissal?
When a worker is dismissed illegally by a business.
What does unincorporated mean?
Businesses where there is no legal difference between the owner and the business.
What is a unique selling point (USP)?
Feature of a product that no other similar products have, used in advertising to try to persuade people to buy it.
What is unlimited liability?
Owner of a business is personally liable for all business debts.
What does untapped mean?
Supply, market, or talent that is available but has not yet been exploited.
What is upward communication?
Passing messages from the bottom of an organisation to those at the top.
What is urbanisation?
Process of constructing more and more buildings on rural land.
What are variable costs?
Costs that change when output levels change.
Who are venture capitalists?
Specialist investors (individuals or companies) who provide money for business purposes, often to new businesses.
What are ventures?
New business activity that involves taking risks.
What are viability studies?
Careful study of how a planned activity will work, how much it will cost, and what income it is likely to produce.
What is viral advertising?
Direct marketing technique in which a company persuades Internet users to forward its publicity material in emails or via social media.
What is visible trade?
Trade in physical goods.
What are wants?
People’s desires for goods and services.
Who are wholesalers?
Persons or businesses that buy goods from manufacturers and sell them in smaller quantities to retailers.
What is a worker cooperative?
Cooperative that is owned by its employees.
