Key Terms

Question 1

Absenteeism

Answer 1

The percentage of staff away from the workplace through absence

Question 2

Acid Test Ratio

Answer 2

A liquidity ratio which compares the most liquid assets to the current liabilities.

See if a judge can afford to pay its bills

Question 3

Aim

Answer 3

A long term target set by a firm

Question 4

Ansoffs Matrix

Answer 4

Assessing the risk involved in certain marketing strategies by looking at how far the firm is moving away from its current product and market

Market Penetration
Market Development
Product Development
Diversification

Question 5

Asset turnover

Answer 5

A financial efficiency ratio which examines how hard the assets are working to generate revenue.

The higher the figure the more efficient the firm is in generating revenue with assets

Question 6

ARR

Answer 6

Average Rate of Return

The average profit from the investment shown

Question 7

Backward vertical intergration

Answer 7

Where a firm takes over or merges with another at a previous of production e.g. a supplier

Question 8

Balance sheet

Answer 8

A document showing all the assets a firm owns and the liabilities and capital the firm owes

Question 9

Boston Matrix

Answer 9

A marketing model which analyses a firms product portfolio in terms of market share and market growth

Question 10

Capital employed

Answer 10

The total long term finance put into a firm from shareholders and long term borrowing

Question 11

Cash flow

Answer 11

Refers to the timing of cash going in and out of a business

Question 12

Competition and Market Authority

Answer 12

The government department responsible for ensuring fair competition in markets who have the power to prevent price fixing and large takeovers

Question 13

Competitive advantage

Answer 13

The ability to offer something better than rival firms and compete successfully e.g. lower prices

Question 14

Competitiveness

Answer 14

The ability to sell products successfully when competing against rivals in the market

Question 15

Conglomerate intergration

Answer 15

Where a firm joins with another in an unrelated market

Question 16

Consultation

Answer 16

Asking for the opinions of others when making decisions

Question 17

Corporate objectives

Answer 17

A medium to long term target set by a company

Question 18

Corporate social objectives (CSR)

Answer 18

The duties a firm has to its stakeholders such as suppliers, employees, customers and society

Question 19

Corporate strategy

Answer 19

A planned method to achieve corporate objectives

Question 20

Correlation

Answer 20

Shows the relationships between 2 sets of data

Question 21

Cost Leadership

Answer 21

A strategy where a firm tries to attain the lowest possible costs in the market in order to compete on price with rivals

Question 22

Cost of sales

Answer 22

The direct costs of selling the good I.e. the variable costs of raw materials

Question 23

Critical Activity

Answer 23

An activity which has no room for delay (I.e. no float) - if it is delayed it will disrupt the overall project time

Question 24

Critical Path

Answer 24

The longest route through a project consisting of activities which have no room for delay

Question 25

Critical Path Analysis

Answer 25

Planning out a series of activities involved in the completion of a project in order to identify the key activities which cannot be delayed

Question 26

Culture

Answer 26

The normal attitudes and behaviours within a workplace

Question 27

Current liability

Answer 27

An item the firm owes which is payed back within A year e.g. overdraft

Question 28

Decentralisation

Answer 28

Where decision making is carried out a local or junior level rather than by senior managers

Question 29

Decision Tree

Answer 29

A quantitative decision making technique which involves exploring the alternative options available including their chances of success and failure and their expected financial outcomes so the most profitable option can be chosen

Question 30

Delayering

Answer 30

Removing management levels of hierarchy from a business

Question 31

Depreciation

Answer 31

Shows the amount by which an asset will fall in value due to wear and tear and obsolescence

Question 32

Differentiation

Answer 32

A strategy where a firm offers a different unique feature to rivals such as extra quality or service

Question 33

Discounted cash flow

Answer 33

Shows the expected worth of expected future cash flows

Question 34

Diseconomies of Scale

Answer 34

Where unit costs increase due to increases in output. Could be caused by communication and demotivating

Question 35

Distinctive Capability

Answer 35

A form of CA that cannot be replicated

Question 36

EST

Answer 36

How soon a project can begin

Question 37

External economies of scale

Answer 37

The cost reductionist available to all businesses as the industry grows

Question 38

External stakeholders

Answer 38

Groups outside a business with an interest in its activities

Question 39

Forward Vertical Integration

Answer 39

Joining with a business in the next stage of production

Question 40

Free Float

Answer 40

The time in which a task can be delayed without affecting the following task

Question 41

Horizontal Integration

Answer 41

The joining in the business in the exact same line of business

Question 42

Inorganic Growth

Answer 42

A business growth strategy that involves mergers

Question 43

Integration

Answer 43

The joining together of two businesses as result of a merger

Question 44

Internal economies of scale

Answer 44

The cost reduction of a single businesses as a market grows

Question 45

Internal stakeholders

Answer 45

Groups inside a business with an interest in its activities

Question 46

Investment Appraisal

Answer 46

The evaluation of an investment project to decide whether it is worthwhile

Question 47

Labour retention

Answer 47

The amount of employees who stay in the company

Question 48

LFT

Answer 48

The latest time that a task in a project can finish

Question 49

Mission statement

Answer 49

A statement describing a businesses purpose and objectives

Question 50

Monopoly

Answer 50

A market dominated by a single business

Question 51

NPV

Answer 51

The net present value of future incomes from a project investment

Question 52

Oligopoly

Answer 52

A market dominated by a few large businesses

Question 53

Payback period

Answer 53

The amount of time it takes to recover the costs of an investment project

Question 54

PESTLE

Answer 54

Analysis of the POLITICAL, ECONOMIC, SOCIAL, TECHNOLOGICAL, LEGAL, ENVIRONMENTAL

Question 55

Portfolio Analysis

Answer 55

A way to analyse the products and services to see if it fits with the strategic plans

Question 56

Product Development

Answer 56

Marketing new products in existing markets

Question 57

ROCE

Answer 57

The profit of a business as a total amount of money used to generate it

Question 58

Total float

Answer 58

The time which a task can be delayed without affecting the project

Question 59

Vertical integration

Answer 59

Where two businesses join at different stage of production