Definitions Flashcards
Profit
To make more money than you spend.
Unincorporated
The owner and the person have the same legal identity
Deed of Partners
Contract between owners (legal agreement)
Board of directors
Appointed by the shareholders, define the goals and strategies of the company,(boss: CEO, VP)
Controlling interest
To be able to influence the vote of the directors you appointed thanks to your shares (shareholders)
IPO
Going public
Market Capitalisation
Value of share (price of a share x amount of shares)
Retained Profits
Money made that is put back into the business
Owner’s Capital
The money the owners of the business have invested into the company
Mission Statement
A statement of the business’s core aims phrased in a way to motivate employees and to stimulate interest by outside groups (eg. Consumers)
Vision Statement
A statement of what the organisation would like to achieve or accomplish in the long term
CSR
Corporate Social Responsibility
Exports
goods/services sold abroad
Imports
goods/services bought from abroad
Cost
Price to produce
Price
price to purchase
Managerial division of labour
workers are more productive if they are specialised in one task
Capital goods
physical goods that are used by industry to produce other goods
Consumer goods
physical goods that are made to be sold to customers
Secondary sector
an industry that produces manufactured goods
Entrepreneur
someone who takes the financial risk of starting and managing a new business
Intrapreneur
someone within a large corporation who takes direct responsibility for turning an idea into a profitable product using entrepreneurial talents
Business plan
a written document that describes a business it’s objectives and strategies, the market it is in and it’s financial forecast
Public Sector
organisation funded & owned by the government
Privatisation
when a business that was originally in the public sector is sold to the private sector
Partnership
a business with more than one owner (2-20 owners) that have a deed of partners (shared capital investments & shared responsibility)
Limited liability
the only liability or potential loss a shareholder has if the business fails is the amount invested in the business
Public Limited Company
a company that has shares on the stock market that anyone can buy (they went through an IPO)
Social Enterprise
a business with mainly social objectives that reinvest most of its profits into benefiting society and making decisions democratically
Cooperative
a group of people acting together to meet the common needs and aspirations of its members sharing ownership
NGO
non governmental organisation - which means that it is a type of business that is not funded or supported by the government and that it has to find its own sponsors (a legal constituted body with a specific aim)
Charity
an organisation that collects money to distribute it to people in need
Opportunity Cost
Cost measured in terms of the next best alternative forgone when a choice is being made; e.g. when deciding to finance a new promotion strategy, employing an extra sales person may need to be foregone.
Capital
The finance needed to set up a business and pay for its continued operations or expansion
Adding value
The process of increasing the value of a resource in the production process
Production
The process of making goods and services from the available factor inputs
Land
Natural resources that can be found on the planet. This includes renewable and non-renewable natural resources such as water, wood, fish and physical land itself
Labour
The physical and mental human effort used in the production process
Added value
The difference between the costs of inputs in the production process and the price of the final output
Structural change
A shift in the relative share of national output and employment that is attributed to each business sector; i.e. primary, secondary and tertiary sectors
Factors of production
The resources used in the production process
Consumer Services
non-tangible products that are sold to the general public and include hotel accommodation, insurance services and train journeys.
Division of Labour
The specialization of workers in the provision of goods and/or services by breaking a job down into particular roles or components that are repeated by the same workers
Capital goods
are physical goods that are used by an industry to aid in the production of other goods and services, such as machines and commercial vehicles.
Consumer goods
are physical and tangible goods sold to the general public. They include cars and washing machines, which are referred to as durable consumer goods. Non-durable consumer goods include food, drinks and sweets that can only be used once
Microfinance
the provision of very small loans by specialist finance businesses, usually not traditional commercial banks
