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B. Business Theme 2 > Key Words > Flashcards

Key Words Flashcards

1
Q

Acid Test Ratio

A

A liquidity ratio which shows whether a firm has enough funds to pay bills by comparing liquid assets to current liabilities

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2
Q

Adverse Variance

A

Where the difference between a budgeted and actual figure will lead to lower profits for the organisation

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3
Q

Asset

A

An item owned by a business

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4
Q

Bank loan

A

An agreed amount of borrowing from the bank which the business repays over an agreed amount of time paying back the amount with interest added

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5
Q

Batch Production

A

Where production activities are performed on all units before the next production activity is carried out

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6
Q

Break even

A

The point at which revenue is equal to total costs so neither a profit or loss is made

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7
Q

Budget

A

A financial target for the future

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8
Q

Buffer stock

A

The minimum amount of stock held by a firm to avoid stock outs

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9
Q

Business cycle

A

Shows how economic output changes over time as measured by the GDP

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10
Q

The 4 stages of the business cycle

A

Boom, recession, slump and recovery

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11
Q

Business failure

A

Where a firm can no longer exist due to either internal or external factors

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12
Q

Business plan

A

A document detailing the financial, marketing, HR and operational implications of a new business venture

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13
Q

Capacity

A

The maximum amount of production output with the given resources

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14
Q

Capacity utilisation

A

The amount of capacity available which is currently being used as a percentage

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15
Q

Capital intensive production

A

Production relies heavily on capital equipment rather than labour

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16
Q

Cash flow

A

The difference between the cash coming in and out of the business in a given time period

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17
Q

Competitive environment

A

The amount and nature of competition surrounding a business

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18
Q

Contribution per unit

A

Shows the amount a product contributes towards the fixed costs of the business

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19
Q

Crowdfunding

A

Where a firm raises finance by advertising funds through an internet website and raises cash by crowds of people putting in finance until the firm achieves its target funding

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20
Q

Economic environment

A

The factors in the economy which can impact onto a business such as inflation, unemployment etc

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21
Q

Economic uncertainty

A

Where economic forecasts for the future are difficult to predict

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22
Q

Efficiency

A

Saving time or money in production

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23
Q

Exchange rates

A

The price of one currency expressed in terms of another

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24
Q

Expenditure budget

A

A financial target for the amount of costs in the future

25
Q

External finance

A

Funds raised from outside the business such as from a bank loan or selling shares to investors

26
Q

Favourable variance

A

Where the difference between the budgeted and actual figure leads to the firm making higher profits

27
Q

Fixed costs

A

Costs that do not change in relation to output

28
Q

Flow production

A

Where each operation is performed on each item one at a time and continuously before the next usually on a large scale production line

29
Q

Government grant

A

Where the gov provides funding for the business normally in exchange for the firm helping society e.g. creating jobs

30
Q

Government spending

A

Where the government funds various activities in the economy e.g. NHS or schools

31
Q

Gross profit

A

The difference between revenue and variable costs

32
Q

Historical budgeting

A

Setting a financial target for the future based on previous figures from last year

33
Q

Income budget

A

A financial target for the future based on previous figures from last year

34
Q

Inflation

A

Rises in the average price level over time as measured by the CPI

35
Q

Internal finance

A

Finance raised from within the firm such as retained profits or selling an asset

36
Q

Job Production

A

Producing one off items tailor made to the customers specification

37
Q

Kaizen

A

Continuous improvement

Making many small changes to improve either quality or efficiency

38
Q

Labour intensive production

A

Where production relies heavily on labour rather than capital equipment

39
Q

Lead time

A

The time between placing an order and having the ordered delivered

40
Q

Legislation

A

The different laws that can affect a businesses

41
Q

Liquidity

A

The ability to turn an asset into cash

42
Q

Margin of safety

A

The difference between the actual output and break even output

Shows how many sales can afford to be lost before firm makes a loss rather than a profit

43
Q

Operating profit

A

The profit from normal business operations after all costs are deducted from revenue

44
Q

Ordinary share capital

A

Finance raised from selling shares

45
Q

Overdraft

A

An agreement with the bank to borrow up an agreed amount beyond what is in the bank account

46
Q

Owners capital

A

Finance put into the business by the owner

47
Q

Peer-to-peer funding

A

Where a business borrows funds from another person via an internet site rather than borrowing from the bank.

48
Q

Productivity

A

Measuring the output per worker to measure efficiency

49
Q

Profit budget

A

A financial target for the future profit to be made

50
Q

Profit for the year

A

The final profit made by a business after all costs are deducted from revenue including any bank interest deductions and all overheads

51
Q

Quality

A

Delighting the customer in all aspects of the product

52
Q

Quality assurance

A

Building in quality at each stage of production using techniques like Total Quality Management to get products right first time

53
Q

Quality circles

A

A small group of workers who meet up and discuss how quality can be improved

54
Q

Rationalisation

A

Cutting back on the scale of output e.g. by laying off staff

55
Q

Retained profit

A

Amount of profit ploughed back into the business for growth and expansion

56
Q

Sales forecasting

A

Making predictions of future sales perhaps by looking at market research or past trends

57
Q

Sales rev

A

Finance received from customers from selling goods/services

58
Q

Sales volume

A

The amount of units sold to customers

59
Q

Solvency

A

The ability of a firm to pay its bills and survive

B. Business Theme 2 (3 decks)

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