key words Flashcards
savings
a business owner providing their own money as part of the start-up capital for a new business
raw materials
the planets natural resources
manufacturing
the making of goods using a production or construction process
service
the provision of deed or action
primary activity
the extraction of raw materials
secondary activity
the manufacturing of products
tertiary activity
the provision of a service
private sector
business owned by individuals to make a profit (sole trader)
public sector
businesses owned by the government
third sector
organisations run for social benefit that are not owned by the government
sole trader
a business that only has one owner
unlimited liability
business and owner are equal
partnership
a business with two or more owners who have joint control
private limited company
a business owned by one or more shareholders who have brought shares privately
limited liability
the owners and business are separate - the business is only liable for the debts
incorporated
the business is deemed a legal entity separate from its owners
public limited company
a business owned by two or more shareholders who have brought shares on the stock exchange
registered charity
a business with charitable status
community interest company
a company set up by private individuals to benefit society rather than make a profit
deed of partnership
a document detailing the rights and responsibilities of each partner
memorandum of association
a document which states what the company has been formed to do
articles of association
a document which governs the internal rules of how the company is to be run
form 10
a form declaring director names the name of the company secretary and the businesses registered office
form 12
a statutory declaration that all requirements of the company registration process have been complied with
aims and objectives
what a business is trying to achieve
revenue
the money a business gets when payment is made for the goods and services it provides
profit
the amount left when costs has been taken away from revenue
break-even
making just enough revenue to cover costs
market share
the proportion of the total market the business sells to
functional area
the division of work into separate areas of expertise
financial forcasts
prediction of a businesses future financial situation
financial statement
the businesses actual financial situation
pricing strategy
the method used to set the prices of the products / services
shortlisting
selecting which candidates to interview
redundancy
losing an employee because their job is no longer needed
quality control
making sure products are made to required standard
refunds
giving customers their money back
stock control
managing stocks of physical resources e.g. raw materials
hierarchical structure
the organisation of job roles by rank
flat structure
a business with hierarchy with few levels
tall structure
a business hierarchy with many levels
centralised structure
a business structure where decisions are made at the top of the hierarchy
decentralised structure
a business where decisions are made lower down the hierarchy
matrix structure
a business structure where teams of people from different functional areas work together on specific projects
command status
downwards flow of the chain relating to who a particular employee can give orders to
reporting status
upwards flow of the chain relation to who a particular employee must report to
superior
higher status
subordinates
lower status
status level
rank of a specific job role
per annum
per year
income statement
a document that reports the profit or loss the business has made
gross profit
the accounting term used when variable costs have been deducted from revenue
operating profit
used when costs of sales and operating expenses have been deducted from revenue
profit before tax
used when costs of sales, operating expenses and non-operating expenses have been deducted from revenue
net profit
used when all business costs have been deducted from revenue
dividends
payments made to shareholders as a reward for investing in the company
retained profit
the amount of profit not distributed to owners
statement of financial position
a document that shows what a business is worth at a given moment in time
non-current assets
assets that the business owns that are intended to remain in the business to help it carry out its day-to-day operations
net book value
the value of non-current assets at the present time
current assets
items the business owns that are likely to be converted to cash during its annual trading cycle
trade receivables
money owed to the business by debtors
prepayments
monies paid in the accounting period
trade parables
money the business owes to creditors, usually for the purchase of stock which the business has brought on credit
accruals
expenses for this accounting period which have yet to be paid
net assets
all of the business assets minus all of its liabilities
total equity
the total capital invested in the business
cash flow statement
a document that shows the historic flow of funds into and out of a business
cash flow forecast
a document that predicts the expected flows of funds into and out of a business in the future
overtime
working extra hours
strike
an organised form of industrial action where workers withdraw their labour and do not turn up for work
boycott
a refusal to buy goods/services
conflict resolution
dealing with and resolving a disagreement completely
conflict management
the process of limiting the negative effects of a conflict
demographic issues
issues relating to the size and structure of the population
disposable income
a person total income minus taxes
automation
the replacement of human labour with machines
CAD/CAM
computer aided design
e-commerce
websites allowing purchases to be made online
EPOS
electronic point of sale
video conferencing
holding virtual meetings using audio and video screens
imports
buying goods from abroad
exports
selling goods to other countries
sterling
the UK currency
ethical factors
issues concerned with doing what is right
sustainability
behaving in a way which preserves the planets natural resources for future generations
corporate social responsibility
a business behaving in a way which improves the welfare of society
internal source of finance
funding obtained from the business itself
external source of finance
funding obtained from outside of the business
short-term financial needs
finance required for up to 12 months
long-term financial needs
finance required for longer than 12 months
benchmarking
judging performance by comparing against a standard
overdraft
a business is allowed to withdraw money from a bank account even of it does not have enough money
loan
a sum of money borrowed fro a set period of time
mortgage
used to buy property
credit card
buy goods now and pay off the bill later
hire purchase
pay a deposit for an asset and then regular payments for a set period of time
trade credit
a business buys goods from a supplier and pays for them later
venture capital
a person invests their own funds into a project which is ‘high risk’ they then own a share of the business
share issue
a limited company issues further shares to family to raise capital to expand a business
crowdfunding
funding a project
business plan
formal document produced by a business that sets out how it will succeed
