Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business Theme 2 > Key Terms > Flashcards

Key Terms Flashcards

1
Q

Economic variables

A

Features of an economist which have effects on business and consumers eg unemployment, inflation and exchange rates

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Internal finance

A

The raising of capital from within the business eg business/owner’s capital, personal savings, retained profit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Owner’s capital

A

A source of (internal) finance provided by the owner of a business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Retained profit

A

Profit is re-invested back into the business which is not paid as a dividend. It is an internal source of finance.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Sale of assets

A

A type of internal finance, involves selling resources that belong to the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Bank loan

A

An external method of finance borrowed from a bank paid back, with interest (over a period of time)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Business angels

A

Individuals who invest in a business in exchange for a stake in the business (shares)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Crowd funding

A

An external source of finance where a large number of individuals provide funding for a business or project in return for shares

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

External finance

A

Money raised from outside the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Grant

A

A sum of money given by a government or other organisation. It does not need to be repaid and no interest is charged.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Leasing

A

A contract to acquire the use of resources such as property or equipment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Loan

A

An external source; amount of money borrowed, usually repayable after a fixed term of more than 12 months

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Overdraft

A

When a business has a negative balance in their bank account because the amount withdrawn is greater than the current balance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Peer-to-peer funding

A

When a person lends money to other individuals or businesses via online transactions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Share capital

A

The finance raised a business selling of new shares

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Trade credit

A

Where a firm receives stock from a supplier, which it does not have to pay for until later

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Venture capital

A

External source of finance when the business issues shares to a small number of investors in return for a capital injection into the company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Liability

A

A liability is an obligation to pay another person

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Limited liability

A

The obligation of a shareholder for the debts of a business is limited to the value of their investment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Unlimited liability

A

The obligation of a business owner to cover all the debts of the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Business plan

A

A document giving details of a variety of aspects about the business in order to provide a strategic look at the business and to attract investors. It contains details such as the product, costs, revenues, cashflow forecasts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Cash flow

A

The movement of cash into and out of a business over a period of time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Cash inflow

A

The flow of cash into a business over

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Cash outflow

A

The flow of cash out of a business over

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Cash-flow forecasts

A

The predicted flow of cash into and out of a business over a period of time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Closing balance

A

Cash left in the account at the end of the month. Net Cash Flow + Opening Balance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Net cashflow

A

The difference between cash flowing in and out of a business over a period of time. Cash Inflow - Cash Outflow

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Opening balance

A

Cash in the bank on the first day of the month

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Consumer trends

A

Habits or behaviour of those involved in the use of goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Economic uncertainty

A

Where consumers are unable to predict their future sales and costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Sales forecast

A

A prediction of the expected level of sales volume for a business for a future period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Average cost

A

The cost of producing one unit. Total Costs / Output

33
Q

Fixed costs

A

Costs that do not change when output changes

34
Q

Revenue

A

The amount of income for a business generated from its sales. Selling Price x Quantity

35
Q

Sales revenue

A

Selling Price x Sales Volume

36
Q

Total costs

A

Total fixed costs plus total variable costs

37
Q

Variable costs

A

Costs that vary according to the level of outout

38
Q

Break-even

A

The level of output where the total revenue is equal to the total cost. Fixed Costs / Unit Contribution

39
Q

Unit contribution

A

Selling Price - Variable Cost Per Unit

40
Q

Margin of safety

A

The difference between the current or planned level of output and the break-even level of output

41
Q

Adverse variance

A

Negative variance eg higher costs than budget

42
Q

Budget

A

A financial plan of income and expenditure prepared in advance

43
Q

Favourable variance

A

Positive variance eg lower costs than budget

44
Q

Historical budgeting

A

A budget based upon previous financial figures

45
Q

Variance analysis

A

Shows the difference between budgeted and actual figures and can be calculated at the end of a financial period, once actual figures are known

46
Q

Zero based budget

A

A type of budget where no money is allocated for spending unless it has firstly been justified

47
Q

Cash

A

An asset of a business which can come from investors, lenders or customers

48
Q

Cost of sales

A

The cost of inventory bought or produced

49
Q

Gross profit

A

Revenue - cost of sales

50
Q

Gross profit margin

A

Gross profit/Sales revenue x100

51
Q

Operating profit

A

Gross profit - other operating expenses

52
Q

Operating profit margin

A

Operating profit/Sales revenue x100

53
Q

Profit

A

Is recorded straight away after sales. Total revenue - total costs

54
Q

Profit for the year margin

A

Net profit/Sales revenue x100

55
Q

Profit for the year / net profit

A

Operating profit - interest

56
Q

Profitability

A

Profit as a proportion of sales

57
Q

Statement of comprehensive income

A

A document to show income and expenditure of a business over a financial year

58
Q

Tax

A

A charge made by governments on activities, earnings and income of individuals and businesses

59
Q

Acid test ratio

A

Current assets-Inventory/Current liabilities

60
Q

Assets

A

Valuable things that a business can use

61
Q

Capital

A

Cash put into the business by the owner

62
Q

Current assets

A

Liquid assets, those assets that will be converted into cash within 12 months e.g. inventories, trade receivables and cash

63
Q

Current liabilities

A

Debts owed by a business that must be repaid within one year

64
Q

Current ratio

A

Current assets/Current liabilities

65
Q

Liabilities

A

Debts owed by a business to lenders and suppliers

66
Q

Liquidity

A

The ability to pay bills in cash when they fall due or The ability to meet current liabilities with current assets

67
Q

Net assets

A

Total assets - Total liabilities

68
Q

Non current assets

A

Long term resources that will be used by the business for more than one year e.g. Property and equipment

69
Q

Non current liabilities

A

Debts owed by the business for more than one year e.g. Loans

70
Q

Shareholders equity

A

The value of the shareholders’ investment in a business

71
Q

Statement of financial position / balance sheet

A

A summary at a particular point in time of the value of a firm’s assets, liabilities and equity

72
Q

Total equity

A

Share capital + Retained profit or, owner’s capital + retained profit less drawings

73
Q

Working capital

A

Working capital is the difference between the current assets and current liabilities of the business. It gives some indication of the
liquidity level within the business.

74
Q

External causes for business failure

A

The factors outside the control of a business which might cause it to fail, e.g. competition, legislation, customer tastes and economic conditions

75
Q

Financial factors for business failure

A

Factors which may contribute to a business running out of cash, e.g. late payments, inability to borrow

76
Q

Internal causes for business failure

A

Factors which a business can control e.g. poor decision-making, loss of key staff

77
Q

Non financial factors for business failure

A

Can come from inside or outside the business e.g. poor management, external shocks

78
Q

Overtrading

A

The situation where a business does not have enough cash to support its production and sales, usually because it is growing too fast

Business Theme 2 (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions