Key Terms Flashcards
Gross profit
Revenue - direct costs
Operating profit
Gross - indirect costs
Control excess operating costs
Net profit
Operating profit - intrest and taxes
Overall profit
Helps show conversion of sales into profit
Retained profit
All the profits made in the history of the buisness added up together
Margin saftey
Solutions to cash flow problems
Reschulding payments
Decrease cash out flow
Sources of fiance
Imcrease casg inflows
Fixed costs
Costs which stay the same no matter the revenue or profit
Total costs
All costs of the business together
Unit costs
Costs to run stuff in the business
Variable costs
Costs which vary depending on the business output
Margin of safety
Difference between actual and break even output
Cash flow
Non fiancial aims of a business
Personal satisfaction
Challenge
Short term sources of finance
Overdraft
Retained profits
Primary sector
Production of raw materials
Secondary sector
The finish of the primary sector and making them into finished goods
Teritary sector
Instead of goods it is services
Enterprise
Making money by buying and selling goods
Sole trader
Enterprise which is owned and run by one person
Patnership
Where business partners make a business together
Private limited company
Private comapny
Limited liabilty
A legal protection where the owner ans shareholders are procted from being responsible for a companies debts
Economies of scale
Economies od scale are cost advantges comapnies ecprience when production and sales become more efficent
Diseconomies of scale
When a business becomes so large they lose economies od scale and cost per unit rises
E comernece
Buying and selling via the internet
Stake holder
Has intrest in the comapny
Share holder
Has a share in the company
Golbalisation
How the world is becoming more connected by iternational trade
Benefits of golbalisation
Wider markets
Economiess of scale
Different legalisation :
Health and safety act
Equality act 2010
Customers right act 2015
Uncertanity
A lack of information and outcomes are hard to predict
Just in case
When you buy buffer stock in case
Flow production
Use of production lines with continous movements of item through the process
Production
The action of making or manufacturing from raw materials
Job production
When one single product is made at a time
Just in time
When there is no buffer stock and stock arrives just in time
Procruement
Procurement is the process by which businesses buy raw materials ,services ,products etc from suplliers to produce their own products and services
Logistics
Logistics is the activity of transport goods to customers
Quality
A product which excellent condition with no defects
Total quality mangement
Is mangement approached to long term succes through customer satisfaction
Franchise
Line manager
Is an employees immediate superior or boss
Organisational chart
This is a plan showing the roles of and the relationships between all the employees in the business
Centralisation
Occurs when a small number of senior manageers in a business make all the important descions
Organistaional structure
Is the way a business arranges itself to carry out it activites
Decentralisation
Allows employees working in all areas of the business to make descions
Span of control
The number of employees managed directly by another employee
Delegation
The passing down of authority to more junior employees
Delayering
The removal of one or more levels of hierachy from a business organstional structure
External recutiment
Is filling a job vacancy from any sutiable person not already employed by the business
Joby analysis
Is the collection and iterpretation of information about a job
Productivity
the quantity of goods or services produced by an employee over a period of time
Retention
Is the proportion of a business workforce who remain with the business over a period of time
Internal recruitment
Takes place when a job vacany is filled from within the existing workforce
Job enrichment
Is designing a job to give intresting and cahllenging tasks
Off the job training
Is offered outside the employers place of work
On the job training
Offered inside the place of work
Ways to understand customers wants and needs
Suggestion box
Questionnaires
Focus groups
Inteviews
Market segementation
A groups of buyers with similair needs within the overall matket
Types of segmentation
Gender
Age
Income
Market reasearch
The process of gathering , analysis and processing data relvant to the market
Primary market reasearch
Data gathered for the first time
Secondary market reasearch
Data gathered from someone else
Marketing mix
All the activties which influence wether the customer buys a product or not -price,place,product,promotion
Need
Something a customer needs to live
Want
Something acustomer woul like to get
Distrubtion
Producer-wholesale-reatailer-consumer
Direct
Can contil customers expreince and marketing and more profit
Intermediate
Overcome marketing cost and wont recieve full price
Wholesale
Whole sale buys in bulj and less able to create good customer service
Promotion
Promtion is the process of remaining , information or persuaiding customers ro buy a product or service
Promational mix
Is the combtiation of promtional. methods used by a business to communicate
Internal source of fiance
Is money that is abaliabke from within the business
Owner funds
Is the money put inti a business by its owner or owners
Asset
Is something that is owned by a business .like land
Ways of promotional mix
Advertising
Sale promotions
Discounts
Samples
Pricing methods
High start
Low start
Cost plus
Comepetive pricing
Contract of employment
Is a legal docuement stating the hours of work , rates of pay , duties etc
Intarents
Are communication networks which can only be accessed by an orgasiational structure
Extranents
Smiliar to intarents but can also be organised by other organsations like suppliers
E
Fixed assests
Long term eg bulifings , machinery
Current assets
Short term eg cash , stock
Liquidity
How easy something can be converted to cash
Current liabilties
A debt owed which has is owned in a short term eg money owes to a supplier
Long term liabilties
Long term money owed eg bank loans
Debt factory
When someone pays someone else to collect a moeny owed from someone else
Deditors
Someone who owes you money
Creditors
Someone you owe money to
Working capital
Money you have avialiable to but stuff Current assests -current liabilties
Current ratio
Ca:cl
Acid test ratio
Ca-stock :cl
