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key terms Flashcards

1
Q

Business

A

an organisation that exists to provide goods and services on a commercial basis to customers

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2
Q

Budgets

A

a financial plan based on a company’s revenue and expenses over a specified future period

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3
Q

Mission

A

An organisation’s aims or long-term intentions, its ultimate purpose

a business mission is sometimes the same as its corporate aims

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4
Q

Corporate Objectives

A

Goals of the whole organisation rather than of different elements of the organisation. They are set in order to coordinate the activities of, give a sense of direction to, and guide the actions of the whole organisation

They are dictated by the mission or corporate aims of an organisation

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5
Q

Strategy

A

the medium to long-term plan through which an organisation aims to attain its objectives

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6
Q

Tactics

A

The means by which a strategy is carried out

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7
Q

Strategic Decision Making

A

Strategic decisions have significant long-term effects on an organisation and therefore require detailed consideration and approval at senior management level. They can be high risk because the outcomes are unknown and will remain so for some time

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8
Q

Functional Decision Making

A

Tends to be short to medium term and is concerned with a specific functional area rather than overall policy. Functional decisions are usually taken to support the implementation of strategic decisions, usually made by middle management

usually made by middle management

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9
Q

Income statement

A

An account showing the income and expenditure (and thus the profit or loss) of a company over a period of time (usually a year). Based on historical data and shows what has happened in the recent past

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10
Q

Assets

A

Items that are owned by an organisation/ business

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11
Q

Non-current assets

A

Resources that can be reused repeatedly in the production process, although they do wear out [depreciate] or lose value over time. These are often known as fixed assets. E.g. land, buildings, machinery and vehicles. The main intangible asset is goodwill, which includes the value of a firm’s brand names, patents and copyrights. The value of intangible assets

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12
Q

Current assets

A

Short-term items that circulate in a business on a daily basis and can be expected to be turned into cash within one year

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13
Q

Fixed Costs

A

Costs that do not vary directly with output

rent, insurance, salaries etc

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14
Q

Variable Costs

A

Costs that vary directly with output
(raw materials, advertising,packaging)

price per unit cost x units = total variable cost

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15
Q

Total Costs

A

The sum of fixed costs and variable costs

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16
Q

Price

A

The amount paid by a consumer to purchase one unit of a product

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17
Q

Revenue

A

The amount of money coming into a business. also known as sales revenue or sales turnover

units sold x price per unit

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18
Q

Profit

A

once the total costs of a business has been deducted from the revenue, if there’s a surplus this is known as profit. (no surplus is a loss)

revenue - total costs = profit

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19
Q

Unincorporated Business

A

There is no distinction in law between the individual owner and the business itself. The identity of the business and the owner is the same

Such businesses tend to be sole traders or partnerships

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20
Q

Incorporated Business

A

This has a legal identity that is separate from the individual owners. As a result, these organisations can own assets, owe money and enter into contracts in their own right

businesses include private limited companies & public limited companies

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21
Q

Unlimited Liability

A

the owners of a business are liable for all the debts that the business may incur

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22
Q

Limited Liability

A

the liability of the owners of a business is limited to the fully paid-up value of the share capital

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23
Q

Sole Trader

A

a business owned by one person, usually self employed. the owner may operate on their own or may employ other people

small in size, rely on own savings/ loans
e.g. hairdressers, plumbers

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24
Q

Private Limited Company (LTD)

A

A small to medium-sized business that is usually run by the family or the small group of individuals who own it. a legal entity that has seperate identity from its shareholders/ members

examples: restaurants, IKEA, specsavers

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25
Q

Public Limited Company (PLC)

A

A business with limited liability, share capital over £50,000, at least two shareholders, two directors, a qualified company secretary and, usually, a wide spread of shareholders.

examples: sainsbury, easyjet, barclays
only make up around 5% of economy

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26
Q

Liabilities

A

Debts that a business owes to others

e.g. suppliers

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27
Q

capital

A

Capital in business is the money and assets that a company uses to fund its operations and growth

investments from the owner

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28
Q

Gross Profit

A

Revenue minus cost of sales. The gross profit shows how efficiently a business is converting its raw materials or stock into finished products

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29
Q

Operating Profit

A

The revenue earned from everyday trading activities minus the costs involved in carrying out those activities.

gorss profit - expenses = operating profit

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30
Q

solvency

A

A measure of a firm’s ability to pay its debts on time. A firm that can meet its financial commitments is described as ‘solvent’

a firm that can’t meet its financial commitments = ‘insolvent’

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31
Q

Short-termism

A

A tendency for businesses to prioritise current performance rather than long-term sustainability of the business

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32
Q

Gross Domestic Product [GDP]

A

A measure of economic activity; the total value of a country’s output over a given period of time, usually provided as quarterly or annual figures

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33
Q

Inflation

A

An increase in the general level of prices within an economy. Or, a fall in the purchasing power of money

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34
Q

Deflation

A

Decrease in the general level of prices within an economy. Or, a rise in the purchasing power of money

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35
Q

Market Capitalisation

A

The value of outstanding shares in a public limited company. Outstanding shares are the total of all ordinary shares issued and fully paid up. Calculated by multiplying the total outstanding shares by the current market price of an individual share.

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36
Q

Demand

A

The amount of a product that consumers are willing and able to buy at any given price over a period of time

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37
Q

Ethics

A

The set of moral values held by an individual or group or organisation

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38
Q

marketing

A

The coordination of activities that ensure that customers get what they want, in the amounts they want, when they want it and at a price that suits them

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39
Q

Marketing mix

the 7 P’s

A

Product, Price, Place, Promotion, Process, People, Physical Evidence

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40
Q

B2B and B2C

A

business to business
business to customer

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41
Q

Market Saturation

A

Occurs when most consumers already own the product and the market is not or can’t grow

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42
Q

Enterprise

A

another term of business

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43
Q

Entrepreneur

A

A person who takes a risk and exploits a gap in the market in order to obtain a profit.

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44
Q

Stakeholders

A

Stakeholders are a person, group or organisation that has an interest or concern in a business

e.g. employees, customers, suppliers

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45
Q

Internal Stakeholders

name examples

A

employees, owners, board of directors etc.

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46
Q

External Stakeholders

A

Creditors, Shareholders, Customers etc.

47
Q

Quantitative data

A

Numerical data that can be graphed

48
Q

qualitative data

A

research based on observation that does not include numerical data

49
Q

Liquidity

A

Liquidity means the ease and cost with which assets can be turned into cash

50
Q

Business Plan

A

A detailed statement of how the business intends to operate, either at start-up or during a given period of time. Business plans are based on forecasts and so cover only a short time

51
Q

Customer loyalty

A

The likelihood that past customers will continue to buy from the business, enhanced by high quality customer service and/or reward programmes.

52
Q

Franchising

A

The sale of the rights to use/sell a product by a franchisor to a franchisee. A fixed fee and/or a percentage is paid in return. The franchiser specifies the standards and provides training and support

53
Q

Unique Selling Point

UCP

A

The key benefit of a good/service; it differentiates the product from others and will be the focus of advertising and promotion

54
Q

Takeover

A

one business takes contol of another

55
Q

Sustainability

A

The process of operating without damaging the environment or depleting natural resources

56
Q

Survival

A

The capacity of a business to stay in business. It is dependent on the business selling sufficient amounts of its goods/services to cover all its costs

57
Q

Supplier

A

a business that provides goods and services

58
Q

Shareholder(s)

A

Those people who own shares in a limited company; each shareholder is a part owner of the business.

59
Q

Risk

A

The possibility that the return on investment will be lower than expected.

60
Q

Promotion

A

Communicating information about the product to:

  • make consumers aware of a product
  • remind customers about a product
  • persuade customers to buy
61
Q

Price skimming

A

Setting a very high price when a product (often technology item) is first introduced to the market in relatively small numbers; only those who can afford to pay high prices to own the latest models will be able to purchase the product. The price is later reduced so that others can afford to buy

62
Q

Trademark

A

A word, symbol, or phrase used to identify a particular company’s product and differentiate it from other companies’ products

63
Q

Equity

A

represents the amount of money that would be returned to a company’s shareholders if all of the assets were liquidated and all of the company’s debt was paid off in the case of liquidation

64
Q

Cah flow

A

The movements of cash into (“inflows”) and out of (“outflows”) a business

65
Q

Breakeven output (or point)

A

The point at which the total sales of a business equal total costs -i.e. the business is making neither a profit nor a loss

66
Q

Working capital

A

The amount of money that a business has available to conduct its day-to-day activities

67
Q

Venture capital

A

Investment made by specialist funds to finance the launch, early development or expansion of a private company

68
Q

Return

A

The rewards to enterprise e.g. profit, satisfaction

69
Q

Sample

A

In market research, a sample is a subset of a population. Sampling is the process of taking and analysing a research sample.

70
Q

Primary research

A

The market research that involves the collection of data that does not yet exist

71
Q

Niche market

A

A smaller part of a larger market in which customers have more specific needs and wants.

72
Q

Market size

A

The total value or quantity of demand in a specific market over a specific period of time. Can be measured in value terms (e.g. sales) or in terms of quantities (e.g. units) bought or sold.

73
Q
A
73
Q

Market segmentation

A

The process of dividing a market into smaller sections (segments) segmentation which contain customers with similar needs and wants

74
Q

Market growth

A

The percentage growth in the size of the market, measured over a specific period

75
Q

Margin of safety

A

The difference between the actual level of output and the break even output

76
Q

Inputs

A

The resources (land, labour, capital, enterprise) that go into producing goods and services

77
Q

Elasticity of demand

A

The responsiveness of demand to a change in price or incomes

78
Q

Demographic

A

Defining a market in terms of social-economic factors such as segmentation age, income, class etc

79
Q

Business angel

A

A particular type of investor, usually a successful entrepreneur, who is willing to invest in high-risk, high-growth firms at a very early stage

80
Q

Adding value

A

A process through which a business increases the worth of the resources included in production so that customers perceive the product to be worth more than the cost of the inputs

81
Q

Adviser

A

An external contact of a business that provides support and advice, sometimes for free

82
Q

Bank loan

A

A fixed amount loan from a bank which is generally used to finance long-term assets

83
Q

Bank overdraft

A

Borrowings from a bank on a current account which are payable on demand

84
Q

Mission statement

A

A qualitative statement that conveys the business’ sincerity and commitment

85
Q

Business objectives

A

A target set by a business that it wants to achieve (medium to long term)

86
Q

Functional objectives

A

Goals of each of the functional areas of a business (including marketing, finance, operations and Human Resources). To ensure the business achieves its corporate objectives

87
Q

Divorce of ownership and control

A

Shareholders are not managing/ deciding the day to day tasks

88
Q

Remuneration

A

Pay from employment

89
Q

Diversification

A

Where a business moves into the production or sale of different goods and services

90
Q

Market standing

A

refers to the ranking of a company in an industry in comparison to its competitors

91
Q

Monopoly

A

When a busines owns 25% + of a market share in an industry

92
Q

Semi-variable costs

A

Costs that combine elements of fixed and variable costs

93
Q

Sales volume

A

The total amount of goods or services sold over a certain period of time

94
Q

Economies of scale

A

Cost advantages reaped by companies when production becomes efficient. Can achieve this by increasing production and lowering costs

95
Q

Private sector

A

Owned and controlled by private individuals

96
Q

Public sector

A

Owned and controlled by local and central government

97
Q

Insolvency

A

A person or business is unable to pay their debts

98
Q

Institutional investors

A

Financial organisations that invest huge sums of money in the shares of plcs quoted on the stock exchange

99
Q

Stock exchange

A

A market where second hand shares of plcs can be bought and sold

100
Q

Ordinary share capital

A

Money given to a company by shareholders in return for a share certificate that gives them part ownership of the company. This is permanent. (Also known as risk capital or equity capital)

101
Q

Dividend

A

A payment made by a company to its shareholders out of profits earned. Dividends are allocated a fixed amount per share, with shareholders receiving a dividend in proportion to their shareholding

102
Q

Hostile takeover

A

Occurs when an acquiring company attempts to take over a target company against the wishes of the target company management

103
Q

Incorporation

A

The process by which a new or existing business registers as a limited company

104
Q

Share price

A

The price of a single share in a company; usually determined by the supply and demand for shares

105
Q

Proposed takeover

A
106
Q

Rationalisation

A

Reorganising the business in order to increase efficiency e.g. delayering

107
Q

Discretionary income

A

Disposable income after all regular bills (mortgage, food, utilities, transport etc) has been deducted

108
Q

Risk seeking

A

an individual who is willing to accept greater economic uncertainty in exchange for the potential of higher returns

109
Q

Risk averse

A

the tendency to avoid risk and have a low risk tolerance. Risk-averse investors prioritize the safety of principal over the possibility of a higher return on their money

110
Q

Primary stakeholders

A

Those who are directly involved and affected, either positively or negatively, by an organisations actions. These people have the power to indulgence and shape decisions

111
Q

Secondary stakeholders

A

The ‘intermediaries’ - ppl or organisations who are indirectly affected by an organisations actions
(Can be internal or external SH)

112
Q

Key stakeholders

A

Can be either primary or secondary stakeholders but will have significant influence upon it importance within an organisation

Business (9 decks)

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