Glossary Unit 1 Flashcards
Cash flow
The money that flows into and out of a business over a given time period.
Cash flow needs to be sufficient as cash is needed to pay bills.
Demographic
the size and structure of the population including features like age profile gender and ethnic makeup.
Dividends
a portion of the profits of the firm given to shareholders.
Ethical
morally correct behaviour e.g. treating workers and the environment well
Fair trade
Buying raw materials at a price that allows a reasonable standard of living for the suppliers and often above at the market price.
Company growth
the increase over time of the revenue of a business. Economic growth refers to the increase in size of the whole economy i.e. the sales of all the businesses in a nation.
Interest rate
is the cost of borrowing money and return for lending money. Borrowers have to pay back the original amount PLUS a charge for borrowing the money. A high interest rate may be a burden for businesses that are highly geared and may encourage consumers to save instead of spend.
Limited liability
Shareholders can only lose the money invested in the company not their entire personal wealth if the business collapses with debts. Limited liability is shown by either Ltd or plc
Market capitalisation
the value of a company as measures by the stock market.
Market Capitalisation = Number of shares x share price
Market conditions
How confident and well-off customers are feeling and the number and strength of competitors. Both consumers and rivals affect sales.
Mission
The main purpose of the organisation
Mutuals
An organisation whose members who collectively own the business and are
also its customers. There are no shareholders E.g. Building Societies
Non-profit organisation
An incorporated organization which exists for the interests of its members or as a charity, so there are no shareholders only trustees benefit financially. E.G. Kimbolton School
Objective
Short–term specific measurable target. E.g. 1m sales next month
Ordinary share capital
the amount of money invested into the business by the shareholders. The shareholders cannot reclaim their money from the firm, but can sell their shares to another party.
