Mock 1 Prep Flashcards
(39 cards)
Define primary sector
A sector in the economy making direct use of natural resources. Ex: fishing, agriculture and mining
Define secondary sector
A sector producing manufactured goods, converting raw materials into components (Ex: plastics from oil) or assembly of a product (ex: building houses, bridges, etc.)
Define tertiary sector
A sector providing services to consumers and other businesses (ex; insurance, transport, etc)
Define mission statement
Brief statements of the purpose of a company to guide the actions of an organization
What is a mission statement used for?
- To spell out the overall goals of an organization
* To provide a sense of direction to aid in decision making for all levels of management.
Define vision statement
Defines where an organization wishes to see itself in the future, sometimes optimistically
Define batch production
Production of a set of identical products in large batches.
How is batch production done?
Work on each batch is finished completely before production switches to another batch.
Used when product demand is steady and frequent.
Define cell production
Workers are organized into independent “cells”, each team comprised of multi skilled staff with responsibility and autonomy for completing a whole unit of work in the production process
Define flow production
Uses continuous and progressive processes, carried out in sequence. One task completed at a time before the next starts
Define job production
Involves the manufacturing of a unique/one-off job. Can be completed by a single person (e.g., a tailor) or a team (e.g., architects/engineers).
Define dividends
Payments a business pays to its shareholders on a proportional basis (%) of the company’s profit (a fixed amount for each share)
Define share capital
Money invested by shareholders
Define debtors
Person that owes a company/individual money
Define creditors
A person/company to whom money is owed
Define joint venture
2 or more companies investing in a shared business project. An LT business activity.
Define strategic alliance
Similar to joint ventures, except they don’t form a new business with a separate legal identity.
Define franchising
A business allowing others to trade under it’s name in return for a fee and royalty payments based on a predetermined share of the sales revenues.
Define franchisee
One who purchases a franchise
Define franchisor
Company owner of a franchise
Define Profit and Loss
Shows the Sales Revenue, Costs and Level of Profit of a company for a given period of time, usually a year.
Define Balance Sheet
Shows what an organization owns and owes to others. indicates the business’s level of working capital and its liquidity, providing insight into the business’s ability to survive in the ST.
Define Cash Flow Forecast
Estimates timing and accounts of cash inflows and outflows over a specific time period (usually a year)
Define Pay Back Period
time needed for an investment project to earn enough profit to repay the initial cost of the investment.
