key terms Flashcards
what is a balance sheet?
a document describing the financial position of a business at a particular point in time
what is a income statement?
an account showing the income and expenditure of a company over a period of time
what are assets?
items that are owned by an organisation
what is a non current asset?
resources that can be used repeatedly in the production process and which are not liquid. eg buildings and machinery
what are current assets?
short term items that are not held by the business for more than one year and are therefore very liquid
what are liabilities?
debts owed by a business
what is total equity?
funds provided by shareholders to set up the business, fund expansion and purchase fixed assets
how do you work out net assets?
non current assets + current assets - non current liabilities - current liabilities
how do you work out assets employed?
net current assets + non current assets
how do you work out total equity?
share capital +reserves
how do you work out capital employed?
total equity + non current liabilities
what is GDP?
a measure of economic activity, the total value of a countrys output over a given period of time
what is an exchange rate?
the price of once country currency in terms of anothers
what is inflation?
an increase in the general level of prices within the economy and a decrease in the purchasing power of the currency
what is deflation?
a decrease in the general level of prices within an economy or a rise in the purchasing power of the currency
what is fiscal policy?
the use of taxationa nd government spending to influence the spending within an economy
what is monetary policy?
controlling interest rates and quantitative easing (money supply) in order to influence the level of spending and demand in the economy
what is protectionism?
the extent to which a government uses controls to restrict the amount of imports entering the country
what is globalisation?
the increased integration and interdependence of national economies
what is urbanisation?
the increase in people living in towns and cities
what is migration?
the permanent movement of people from one region to another
what is csr?
the duties of an organisation towards its employees, customers and the wider society including the environment
what is an investment decesion?
the process of deciding whether or not to under take capital investment (the purchase of a non current asset)
what is the payback period?
the length of time it takes for an investment to pay for itself from the net returns provided by that investment
what is the investment criteria
the ways in which a business will judge whether an investment should take place
what is sensitivity analysis?
A technique used to examine the impact of possible changes in certain variables on the outcome of a project
what is product differentiation?
the degree to which consumers see a particular brand as being different from other brands because of a USP for example
what is retrenchment?
the cutting back of an organisations scale of operations
what is organic growth
when a firm expands its existing capacity or range of activities by extending its capacity rather than integration with another firm
what is external growth?
when a firm expands by integrating another firm as a result of either a merger or a takeover
what is integration?
the coming together of two or more businesses via merger or takeover
what is a takeover?
where one firm buys the majority of shares in another firm and therefore assumes full management control
what is economies of scope?
cost advantages that result from firms providing a variety of products rather than specializing in just one
what is the experience curve?
a graph showing that the more a business produces/grows the lower the costs per unit. essentially meaning that the more experienced a firm gets ant making a product the lower the costs are to produce it
what is synergy?
the whole is greater than the sum of the two businessss. 1+1=3
what is overtrading?
takes place when a business grows too quickly and doesnt have enough working capital to operate on a day-to-day basis
what are the five stages of the grieners model?
creativity, direction, delegation, co-ordination and collaboration
what are the five crisis of the grieners model?
leadership crisis, autonomy crisis, control crisis, red tape and growth crisis
what is a franchise?
ẁhen a business gives another business the right to sell its products
what is conglomerate intergration?
the coming together of firms operating in unrelated markets
what is innovation?
the successful exploitation of new ideas
what is kaizen?
the process of encouraging employees to implement small incremental changes in order to achieve innovation, better quality, or greater efficiency
what is R+D
the scientific investigation necessary to discover new products or manufacturing processes
what is bench marking?
implementing processes, taken from other firms, into your business. Usually taken from businesses which are the best in its industry
what is intellectual property?
any intangiable assets that arise from human knowledge and ideas
what is a patent?
a official document permitting the holder to be the only user or producer of the product or service FOR A SPECIFIC PERIOD
what is copyright?
legal protection against copying for authors
what is off-shoring?
where businesses outsource or sub-contract business activities overseas largely because labour and other production costs are much cheaper there
what is licensing?
a business arrangement whereby one company gives another company permission to manufacture its goods for a specified fee
what is an alliance?
agreement between two or more companies to combine their strengths and expertise in order to undertake a mutually beneficial project
what is direct investment?
the taking of a controlling ownership in a company in one country by a company based in another country. can be by organic growth eg Lidl or by takeover
what is internationalization?
the growing tendency for businesses to operate outside their home countrys borders
what is big data?
large pools of data that can be captured, communicated and analysed
what is data mining?
the process whereby a business transforms raw data into useful information to support the various activities of the business
what is enterprise resource planning?
a businesses use of its infomation system so that it can automate and integrate its core business processes
what does delayering lead too in a organisational structure?
wider and flatter structure
what are organic structures?
flat organisational structures, horizontal communication and interactions
what are mechanistic structures
hierarchical and bureaucratic organisational structures, highly centralised authority
