Definitions Flashcards
Profit
Total revenue is greater than total costs
To make more money than you spent
Mission
Overall purpose or main corporate aims
Mission statement
Tells you the purpose of a business.
Makes stakeholders aware of what the business does and why and to encourage all employees to work towards these aims
values, strategy, standards
Objectives
Helps enable them to achieve their missions
Turns the overall aims of the business into goals that must be met
Corporate objectives
Goals of the business as a whole
Depends on the size of a business
Functional objectives
Objectives of each department
More detailed and specific - helps achieve corporate objectives
Cash flow
Money that moves in and out of a business over a period of time
overtrading
business produces too much; they have to pay suppliers and staff so much that they’ll become insolvent before they get a chance to be paid by their customers
Ethical objectives
based on moral principles - how to treat people and the environment
Non - profit organizations
charities or social enterprises set to achieve social or ethical objectives
Revenue
Value of sales or turnover
Amount of money generated by sales of a product before deductions
Fixed costs
Don’t change with output
Variable costs
Change with output
Loss
Total costs are greater than total revenue
Large scale production
more output lowers cost per unit produced as FC are shared out between more items
Budgets
Forecasts how much costs are going to be over a year
Public sector
Owned and run by the government aim to provide services to the public - no profit
Private sector
owned and run by private individuals aim to make a profit but can also be non profit
Unlimited liability
The business and owner are seen as one under the law
Business debts are personal debts of the owner
Huge financial risk
Limited liability
Owner’s aren’t personally responsible for the debts of the business
Separate legal identity
Only lose the money you invest
Sole trader
Self employed and has full responsibility for the financial control of the business, meeting running costs and capital requirements
Has unlimited liability
Capital requirements
Money invested to set up a business or fund growth
Divorce of ownership and control
shares in a PLC can be owned by money - people who own the company don’t necessitate control over the company - controlled by directors
Ordinary share capital
shares sold by companies in order to raise money - LT investment
Dividend
Payment return for their investment
Proportion of the profits earned by the company paid to shareholders
Fixed amount per share
Market capitalization
Total value of all the ordinary shares issued by a company
Shareholder
Owns at least one share in a company
Majority shareholder
owns more than 50% of the shares
Has the most power in decision making
Capital gain
buy share prices when they are low and sell them when risen to make a profit
Interest rates
reward for saving and cost of borrowing
Fairtrade
Pay higher and fairer prices for products which improves standard of living for suppliers employees
Sweatshop
Factory where workers are forced to work long hours in poor conditions for low pay
Management
Telling people what to do and organizing resources to get the job done
Leadership
motivating and inspiring people - persuasion of decisions
Opportunity cost
Value of the next best alternative that’s been given up
Stakeholder
Anyone who is affected by a business and has a vested interest in what the business has to offer
Marketing
Identifies customer wants and needs and tries to anticipate future demand
Helps businesses earn profit
Research, planning, analysis and the marketing mix
Marketing mix
All the decisions a business makes about promoting and selling a product
Primary / secondary data
primary - new data
secondary - analyze data already available
Confidence intervals
A range of values you’re fairly sure the value for the population will lie within
Product line
related products - usually the same product different size, similar characteristics, use and target customers