Key words - Year 1 Flashcards
Profit
The financial gain earned by a business after deducting total costs from total revenue.
Cash flow
The movement of money in and out of a business, reflecting its liquidity and ability to meet financial obligations.
Mission / mission statement
The fundamental purpose or reason for the existence of an organisation, defining its core values and guiding principles.
Objectives
Specific, measurable targets (SMART targets) set by an organisation to achieve its mission.
Revenue
The total income generated by a business from its primary operations, typically from sales of goods or services.
Fixed costs
Expenses that remain constant regardless of production or sales volume, such as rent or salaries.
Variable costs
Expenses that fluctuate based on production or sales volume, such as raw materials.
Sole trader
An individual business owner who operates and manages a business on their own, assuming full responsibility for profits and losses.
Private limited company (ltd)
A business entity with limited liability, typically owned by a small group of shareholders, and restricted from offering shares to the general public.
Public limited company (plc)
A corporation whose shares are traded on a public stock exchange, allowing a wide range of investors to buy and sell ownership stakes in the company.
Private sector
The part of the economy that is owned and operated by private individuals or companies, aiming to generate profits.
Public sector
The part of the economy that is owned and operated by the government, providing goods and services to the public.
Non-profit organisation
An organisation that operates for purposes other than profit, such as charitable, educational or social causes.
Social enterprise
A business entity that operates with a primary focus on addressing social or environmental issues.
Unlimited liability
The legal obligation of business owners to personally cover all debts and liabilities of the business, risking personal assets.
Ordinary share capital
The equity capital raised by a company through the issuance of ordinary shares to shareholders.
Market capitalisation
The total value of a company’s outstanding shares in the stock market, calculated by multiplying the current share price by the number of shares.
Dividends
Payments made by a company to its shareholders as a distribution of profits, usually in the form of cash or additional shares.
Management
The process of coordinating and directing the activities of an organisation to achieve its goals efficiently through planning, organising and controlling resources.
Leadership
The ability to inspire, influence and guide others towards achieving a common goal or vision.
Autocratic
A leadership style where decisions are made by a single individual with little or no input from subordinates, often characterised by strict control and centralised authority.
Paternalistic
A leadership style where the leader acts as a fatherly/motherly figure, making decisions for the benefit of employees while expecting loyalty and obedience in return.
Democratic
A leadership style that encourages participation, collaboration and decision-making by team members, promoting equality and shared responsibility.
Laissez-faire
A leadership style characterised by minimal intervention and a hands-off approach, where individuals or teams are given freedom to make their own decisions and manage their own tasks.
Opportunity cost
The value of the next best alternative that must be forgone when a decision is made to allocate resources to a particular option.
Stakeholder
Individuals or groups who have an interest, involvement, or are affected by the activities and outcomes of a business, including employees, customers, shareholders, and the community.
Sales volume
The total number of units of a product or service sold within a specified time period.
Sales value
The total monetary worth of a product or service sold within a specific time frame, calculated by multiplying the number of units sold by their respective prices.
Market size
The total value or quantity of a specific product or service that can potentially be sold in a defined market during a given period, often measured in terms of revenue or units.
Market share
The percentage of total sales within a specific market that a particular company or product holds, reflecting its relative position compared to competitors.
Qualitative data
Information or data that is descriptive in nature and provides insights into opinions, behaviours and attitudes.
Quantitative data
Information or data that is numerical in nature and can be measured and quantified.
Primary market research
The process of collecting original data directly from the source through methods like surveys, interviews or observations.
Secondary market research
The process of gathering existing data and information that has already been collected by others, such as industry reports, articles or government publications.
Sampling
The process of selecting a subset of individuals or units from a larger population to represent the whole.
Random sampling
A sampling technique where every member of the population has an equal chance of being selected for the sample.
Stratified sampling
A sampling technique where the population is divided into subgroups or strata, and random samples are taken from each subgroup.
Quota sampling
A sampling technique where specific quotas or proportions of the population are selected based on certain characteristics.
Positive correlation
A statistical relationship in which the values of two variables tend to move in the same direction, meaning an increase in one variable corresponds to an increase in the other.
Negative correlation
A statistical relationship where the values of two variables move in opposite directions, indicating that an increase in one variable is associated with a decrease in the other.
Confidence interval
A range of values the research is expected to fall between.
Extrapolation
The process of estimating or projecting future data points based on existing trends or patterns.
Segmentation
The process of dividing a market into distinct groups of consumers based on similar characteristics or needs.
Positioning
The strategic process of creating a distinct identity or image for a product or brand in the minds of consumers relative to competitors.
Niche marketing
A marketing strategy that targets a specific segment or niche of the market with specialised products or services.
Mass marketing
A marketing strategy that targets the entire market with standardised products or messages.
Boston matrix
A strategic planning tool that categorises a company’s products or business units based on their market share and growth rate.
Product life cycle
The stages that a product goes through from introduction to decline, including development, growth, maturity and decline.
Extension strategies
Marketing strategies aimed at extending the life cycle of a product.
Penetration pricing
A pricing strategy where the initial price of a product is set low to gain market share quickly.
Price skimming
A price strategy where the initial price of a product is set high to maximise profits from the most eager customers before gradually lowering the price.
Branding
The process of creating unique name, design, symbol or image that identifies and differentiates product or service from competitors.
Viral marketing
A marketing technique that relies on individuals spreading a marketing message or content rapidly through word-of-mouth or online sharing.
Multi-channel distribution
The use of multiple channels or methods to distribute products or services to reach a wider audience, such as online sales, retail stores and direct sales.
Digital marketing
Marketing strategies and tactics that utilise digital technologies and platforms, such as social media, email and websites, to promote products or services.
E-commerce
The buying and selling of goods or services over the internet or through electronic channels.
Added value
The increase in worth of a product or service because of the production process or additional features, measured by the difference between the selling price and the cost of inputs.
Labour productivity
The measure of output produced per unit of labor input.
Unit costs (average costs)
The average cost per unit of output, calculated by dividing total production costs by the number of units produced.
Capacity
The maximum level of output or production that a business can sustain over a given period with its existing resources.
Capacity utilisation
The extent which a business utilises its production capacity to meet demand, calculated as actual output divided by maximum possible output, multiplied by 100.
Efficiency
The ratio of output to input, measuring how well resources are utilised to achieve desired outcomes.
Just in time (JIT)
An inventory management approach that aims to minimise inventory levels by receiving goods only as they are needed in the production process.
Just in case (JIC)
An inventory management approach where businesses maintain higher inventory levels as a precaution to meet unexpected increases in demand or supply chain disruptions.
Lean production
A production philosophy that emphasises minimising waste, improving efficiency and maximising value for customers through continuous improvement.
Labour intensive
A production processor industry that requires a significant amount of labour relative to capital inputs.
Capital intensive
A production process or industry that relies heavily on machinery, equipment or capital investment relative to labour inputs.
Quality assurance
The systematic process of ensuring that products or services meet specified standards and conform to established quality criteria.
Quality control
The process of inspecting, testing and monitoring products or services during and after production to ensure they meet predetermined quality standards.
Outsourcing
The practice of contacting out certain business functions or processes to external third-party service providers.
Temporary employees
Workers who are hired for a limited period to fulfil specific roles or tasks.
Part-time employees
Workers who are employed for fewer hours than full-time employees, typically working on a regular schedule.
Producing to order
A production strategy where goods are manufactured only after receiving customer orders, reducing the need for inventory storage and minimising waste.
Lead time
The amount of time it takes for an order to be fulfilled from the moment it is placed until it is delivered to the customer.
Re-order levels
The predetermined inventory level at which new orders should be placed to replenish stock and maintain sufficient inventory levels.
Buffer level
An additional inventory stock kept as a reserve to account for unexpected fluctuations in demand, supply chain disruptions or production delays.
Re-order quantity
The quantity of goods that shucked be reordered when inventory levels reach the re-order point, ensuring continuity of supply.
Return on investment (ROI)
A measure of the profitability of an investment, calculated as the ratio of net profit generated by the investment to the initial investment cost.
Gross profit
The difference between revenue and the cost of goods sold, representing the profit earned from primary business activities before deducting other expenses.
Operating profit
The profit earned from a company’s core business operations after deducting expenses from gross profit.
Profit for the year
The net income or profit earned by a company over a specific accounting period, typically calculated after deducting all expenses, taxes and dividends.
Adverse variance
A difference between actual performance and budgeted or expected performance that results in a negative impact on a company’s financial results.
Favorable variance
A difference between actual performance and budgeted or expected performance that results in a positive impact on a company’s financial results.
Break even output
The level of output at which total revenue equals total costs, resulting in neither profit nor loss.
Margin of safety
The difference between actual sales and the break-even point, representing the amount by which sales can drop before a company incurs losses.
Contribution per unit
The amount of revenue remaining after deducting variable cost per unit from selling price, representing the contribution of each unit sold towards covering fixed costs.
Total contribution
The total amount of revenue remaining after deducting variable costs from sales revenue, available to cover fixed costs and contribute to profit.
Payables
Amounts owed by a business to its suppliers or creditors for goods or services purchased on credit.
Receivables
Amounts owed to a business by its customers or debtors for goods or services provided on credit.
Profit from operations
The profit earned from a company’s core business activities before deducting interest and taxes.
Break even analysis
A financial technique used to determine the level of sales or output needed to cover total costs and break even, helping businesses make informed decisions.
Debt factoring
A financing arrangement where a business sells its accounts receivable to a third party (factor) at a discount to obtain immediate cash.
Overdrafts
Short-term loans provided by banks that allow businesses to withdraw more money from their bank accounts than they have available, up to an agreed limit.
Retained profits
The portion of a company’s net income that is retained and reinvested in the business rather than distributed to shareholders as dividends.
Share capital
The total value of funds raised by a company through the issuance of shares to shareholders, representing ownership in the company.
Loans
Funds borrowed by a company from external sources, typically financial institutions or lenders, which must be repaid with interest over a specified period.
Venture capital
Equity financing provided to early-stage, high-potential startups or small businesses by investors in exchange for ownership stakes, with the expectation of high returns.
Crowdfunding
A method of raising capital for a project or venture by soliciting small contributions from a large number of individuals, often through online platforms.
Cash flow
The movement of money in and out of a business, reflecting its liquidity and ability to meet financial obligations.
Employee engagement
The extent to which employees are committed to their work, motivated to contribute to organisational success, and feel a sense of fulfilment and connection to their job and workplace.
Talent development
The strategic process of identifying, attracting, developing and retaining skilled employees to meet current and future organisational needs.
Training
The process of providing employees with specific knowledge, skills and competencies to improve performance and productivity in their current roles.
Diversity
The presence of a variety of backgrounds, perspectives and characteristics within a workforce, including difference in race, gender, ethnicity, age and sexual orientation.
Hard human resource management (hard HRM)
A management approach that treats employees as just another resource for the achievement of business goals.
Soft human resource management (soft HRM)
A management approach that aims to empower employees and support them to achieve their potential.
Labour turnover
The rate at which employees leave and are replaced within an organisation over a specific period, often expressed as a percentage of the total workforce.
Functional structure
An organisational design where employees are grouped based on their specialised functions, such as marketing, finance or operations.
Product-based structure
An organisational design where employees are grouped according to the products or services they work on.
Regional structure
An organisational design where employees are organised based on geographic regions, accommodating differences in local markets, regulations or customer needs.
Matrix structure
An organisational design that combines elements of both functional and product structures, allowing employees to report to multiple managers and work on cross-functional teams.
Authority
The power or right to give orders and make decisions.
Span
The number of subordinates or employees directly reporting to a manager.
Hierarchy
A system of ranking and organising individuals or groups within a business based on authority, responsibility and status.
Delegation
The process of assigning authority to subordinates to carry out specific tasks or decisions, while retaining overall accountability.
Centralisation
The concentration of decision-making authority at the top levels of an organisation.
Decentralisation
The distribution of decision-making authority to lower levels of an organisation, allowing greater autonomy.
Human resource plan
A strategic document that outlines workforce needs, goals and strategies for recruitment, development and retention of employees.
Recruitment
The process of attracting, sourcing and selecting qualified candidates to fill job vacancies within a business.
Redeployment
The transfer of employees from one role or department to another within the same business, often to meet changing business needs or utilise existing skills.
Redundancy
The termination of employment due to the elimination of a job role or position that is no longer necessary or viable within an organisation.
Piece rate
A compensation system where employees are paid based on the number of units or pieces they produce or complete.
Commission
A form of compensation tied to sales or performance, usually calculated as a percentage of sales revenue generated.
Salary
A fixed, regular payment paid to an employee on a monthly or annual basis, regardless of the hours worked or output produced.
Performance-related pay
A compensation system that links an employee’s pay to their individual or team performance, typically based on predetermined goals or metrics.
Empowerment
The delegation of authority and decision-making power to employees.
Flexible working
A work arrangement that allows employees to vary their working hours, location or patterns to accommodate personal needs or achieve a better work-life balance.
Job enrichment
A job design approach that involves increasing the depth of tasks and responsibilities within a role to provide employees with greater autonomy, challenge and opportunities for growth.
Job rotation
A human resource development strategy that involves periodically moving employees between different roles or departments within a business to broaden their skills and experiences.
Trade union
An organised group of workers formed to protect and promote their interests, often involved in negotiations with employers regarding wages, benefits and working conditions.
Works council
A representative body of employees within a business, typically elected or appointed to represent employee interests and facilitate communication with management.
