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English > Business Theme 2 and 3 > Flashcards

Business Theme 2 and 3 Flashcards

1
Q

Owner’s capital

A

How much the owner has invested into the business or the assets of the business the owner owns

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2
Q

Creditors

A

People who the business owes money to

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3
Q

Retained profit

A

Profit that gets stored then reinvested into the company

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4
Q

Sources of finance - where the finance is coming from

A

Family and friends, crowd-funding

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5
Q

Methods of finance - how the finance is provided

A

Loans, venture capital, grants

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6
Q

Insolvency

A

The inability to pay debts because of heavy loss

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7
Q

Liquiditation

A

Turning assets into cash

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8
Q

Business plan

A

A plan documenting how a business will reach their objectives
- Company and product description
- Target audience
- Competetive analysis
- Funding requirements

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9
Q

Cash flow forecast

A

A statement of expected cash inflow from sales, and expected cash outflow to cover costs

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10
Q

Overdraft

A

When a bank allows you to withdraw more money than the money that actually exists in your current bank account

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11
Q

Main causes of cash flow problems

A

Low profits, overtrading

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12
Q

Overtrading

A

When a business expands too quickly without the resources to support that growth

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13
Q

Debt factoring

A

When a business liquidates their invoices via a third party. (quick easy cash, don’t have to wait for payers)

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14
Q

Lean production

A

A method of production where reducing waste is a priority.

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15
Q

Advantages of lean production

A

Reduced waste, improved quality (because root of defects and errors are addressed)

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16
Q

Disadvantages of lean production

A

Requires high amounts of training, investment in equipment

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17
Q

Margin of safety

A

Margin of safety shows how much a business’ revenue can fall before it starts making a loss. The greater the margin of safety, the better the position for the business.

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18
Q

Sales forecast importance

A

Assesses ability to break even, help set budgets

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19
Q

Ways to increase capacity utilisation

A

Staff work longer shifts, containerisation

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20
Q

Efficiency

A

An employees ability to increase the output of products with a fixed amount of raw materials

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21
Q

Productivity

A

How much output an employee can produce in a fixed amount of time

22
Q

Lean production

A

A method of production that focuses on minimising waste

23
Q

Capacity

A

Refers to the maximum amount of output that it can produce with its limited raw materials

24
Q

Flexible workforce

A

A flexible workforce is a group of employees who have the ability to adapt to changing work demands and schedules

25
Q

Merger

A

a combination of two separate firms to create one new business entity

26
Q

Joint venture

A

When two businesses come together to work on a specific project, they can share ideas and resources

27
Q

Batch production

A

Producing a batch of identical products before switching to a different set.

28
Q

Flow production (mass)

A

A continuous production process where items are produced in a sequence along a production line.

29
Q

Job production

A

Producing a single product or service, often customized to a specific customer’s requirements.

30
Q

Cell production

A

A team-based production system where the production process is divided into cells, and each cell is responsible for completing a part of the product.

31
Q

Buffer stock

A

Buffer stock is excess stock that is kept by a business in case of an emergency lack of supply.

32
Q

The depreciation of the pound does what to import costs and export costs?

A

Weaker pound imports dearer exports cheaper (WPIDEC)

33
Q

The appreciation of the pound does what to import costs and export costs?

A

Stronger pound imports cheaper exports dearer (SPICED)

34
Q

Exchange rate

A

The value of one currency expressed in that of another

35
Q

Interest rates

A

The cost of borrowing (for the client) or the reward of saving (for the business)

36
Q

Inflation

A

The general increase in price

37
Q

Ansoff’s Matrix

A
  • Market Penetration
  • Market development
  • Product development
  • Diversification
38
Q

Organic growth

A

The expansion of a company achieved through internal efforts

39
Q

Inorganic growth

A

company’s expansion through external activities like mergers, acquisitions, partnerships, or alliances

40
Q

Limitations of some general graph analysis types like (decision trees, time-series, critical path analysis, supply and demand, balance sheets)

A
  • Potential bias
  • Limited to quantitative or qualitive data
  • Doesn’t work for large projects
  • Static representation, its only a snapshot
41
Q

Horizontal and vertical intergration

A
  • Horizontal integration occurs when a company acquires or merges with another company that operates at the same level of the supply chain in the same industry.
  • Vertical integration occurs when a company acquires or merges with businesses that operate at different stages of the supply chain
42
Q

Unincorporated

A
  • When the owner is personally liable for the business’s debts and obligations, they are not separate from the business.
  • (Sole traders, partnerships)
43
Q

Incorporated

A

When the business is a legal entity that is separate from its owners or managers, they are only liable for investments they’ve put into the business.
- (All other businesses)

44
Q

Financial risks

A
  • Investment risk
  • Loans and debt
  • Economic downturns
45
Q

Why would a business want to stay small

A
  • Flexibility in responding to customer needs
  • Reduced costs in terms of rent, wages
46
Q

Working capital

A

Expenses for day-to-day operations:
- Cash used for change in the cash register
- Invoices (formal document documenting a payment made)

  • Working capital helps businesses meet short-term liabilities, keeping the business smooth
  • Excess working capital can be reinvested into the business
47
Q

Causes of change in a business

A
  • Change in leadership style
  • Change in performance (leads to pricing and marketing strategy adjustments)
48
Q

PESTLE - influences of a global organisation

A

Political
Economic
Sociological
Technological
Legal
Environmental

49
Q

Operating profit

A

Profits before taxes and interest

50
Q

What do budgets do

A
  • Provide benchmarks to compare to
  • Help businesses allocate resources

English (22 decks)

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