Test Revision Flashcards
Ethical
morally correct behaviour e.g. treating workers and the environment well
Market capitalisation
the value of a company as measures by the stock market.
Market Capitalisation = Number of shares x share price
Private Limited Company
A limited liability business where shares are not
freely available for sale, decisions can be made by the owners. They are usually small or medium sized firms but there are exceptions e.g. Virgin.
Fair Trade
Buying raw materials at a price that allows a reasonable standard of living for the suppliers and often above at the market price.
Non-profit organisations
An incorporated organization which exists for the
interests of its members or as a charity, so there are no shareholders only trustees benefit financially. E.G. Kimbolton School
What is a Share?
A certificate indicating part ownership of a company. The share entitles the holder to receive dividends and voting rights to affect the way the firm is run.
Define “the transformation process”
describes what happens inside the business. This is where value is added to inputs to create outputs
Dividends
a portion of the profits of the firm given to shareholders
Define Growth
the increase over time of the revenue of a business. Economic growth refers to the increase in size of the whole economy i.e. the sales of all the businesses in a nation.
Limited liability
Shareholders can only lose the money invested in the company not
their entire personal wealth if the business collapses with debts. Limited liability is shown by either Ltd or plc
Private sector
Any organisation that is not government run or owned.
Public sector organisations
Government-owned organisations.
State the revenue formula.
Revenue = Price x quantity sold
Shareholder
Part-owners of a business who can vote at the AGM and receive
dividends.
Shareholder
Part-owners of a business who can vote at the AGM and receive
dividends.
Define a business
an organisation that exists to provide goods and services on a commercial basis to customers
Define fixed costs.
Costs that do not change directly with the level of output
What are public limited companies?
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.
Define a Sole Trader.
An individual who owns and runs a business. S/he operates under unlimited liability so are personally responsible for all business debts
What does CELL stand for?
Capital, Enterprise, Land. Labour
What is the added value formula?
Added value = selling price – the cost of bought in materials, components and services
What is the total costs formula?
Total costs = Fix costs + variable costs
Define profit
Is the difference between a firm’s revenues from its trading activities and its total costs. It is a reward for risk and a return on capital invested.
Variable costs
Costs that change directly with output. They will increase by a set amount each time a new unit is made.
Define revenue.
the income generated by sales of a product
