module 1 definitions

Question 1

cash flow

Answer 1

the money that flows into and out of a business over a given time period. net cash flow is the cash in minus the cash out and this needs to be sufficient to pay bills.

Question 2

demographic

Answer 2

the size and structure of the population including features like age profile, gender and ethnic makeup.

Question 3

dividends

Answer 3

a portion of the profits of the firm given to the shareholders

Question 4

ethical

Answer 4

morally correct behaviour

Question 5

fair trade

Answer 5

buying raw materials at a price that allows a reasonable standard for the suppliers and not necessarily at the market price

Question 6

growth
1 company
2 economic

Answer 6

1 the increase over time of the revenue of the business

2 increase in size of the whole economy

Question 7

interest rate

Answer 7

the cost of borrowing money and the return for lending money. borrowers have to pay back original amount plus a charge for borrowing the money

Question 8

limited liability

Answer 8

shareholders can only lose the money invested in the company not their entire personal wealth if the business collapses with debts (ltd or plc)

Question 9

market capitalisation + equation

Answer 9

the value of a company as measured by the stock market

market cap. = no. of shares x share price

Question 10

market conditions

Answer 10

how confident and well off customers are feeling

Question 11

mission

Answer 11

the main purpose of an organisation

Question 12

mutuals

Answer 12

an organisation whose members collectively own the business and are also its customers. there are no shareholders

Question 13

non-profit organisatons

Answer 13

an incorporated organisation which exists for the interests of its members or as a charity, there are no shareholders and only trustees benefit financially

Question 14

objective

Answer 14

short term specific measurable target

Question 15

ordinary share capital

Answer 15

the amount of money invested into the business by the shareholders

Question 16

private limited company

Answer 16

a limited liability company where shares are not freely available for ale, decisions can be made by owners.

Question 17

private sector

Answer 17

any organisation that is not government run or owned

Question 18

profit + equation

Answer 18

the difference between a firm’s revenues from trading activities and its total costs
profit = total revenue - total cost

Question 19

public sector organisations

Answer 19

government owned organisations

Question 20

public limited companies

Answer 20

large firm whose shares can be bought and sold by the general public on the stock exchange. the owners appoint managers to run the business

Question 21

revenue (turnover) + equation

Answer 21

income geneated by the sales of a product (also known as sales revenue or sales value)
revenue = price x quantity

Question 22

share

Answer 22

a certificate indicating part ownership of a company. the share entitles the holder to recieve dividends and voting rights to affect the way the firm is run

Question 23

shareholder

Answer 23

part owners of a business who can vote at the AGM and receive dividends

Question 24

social goal

Answer 24

an aim of benefiting the community, environment or some external stakeholder

Question 25

sole trader (sole proprietor)

Answer 25

an individual who owns and runs a business, operates under unlimited liability so are personally responsible for all business debts