The Business Environment Flashcards
What is cash flow?
Cash flow is the movement of money into and out of a business, reflecting its financial health.
What does negative and positive cash flow mean?
Positive cash flow means more money is coming in than going out, while negative cash flow indicates the opposite.
What does secondary activities involve?
A business involved in manufacturing products.
What does primary activities involve?
A business whose main activity is to extract raw materials
What is tertiary activity?
A business that provides a service
Examples of tertiary service?
Retailers such as supermarkets,online traders and market stalls.
Different sectors of operations?
Private,public and third sector.
What is a private sector?
Businesses who are owned by individuals ,sometimes owned by one individual and sometimes many individuals.
Name some examples of private sector businesses?
Tesco,Apple,Amazon and Nike
What are public sector businesses?
Are businesses owned by the state/goverment.They are controlled by central or local government.
What is a third sector business?
Are those who run for social benefits that are not owned by the government.
Examples of third sector businesses
Muslim Aid,Red Cross society and royal voluntary service
Who owns public limited companies?
Owned by shareholders who hope to make a profit.
In which sector does the public limited company operate in?
Private sector
What are the different forms of legal business ownerships?
Sole trader,patnerhsip,private limited company and public limited company.
What is sole trader?
A business that only has one owner
What are some characteristics of a sole trader??
The owner has unlimited liability,full control of the business and business operates in the private sector.
What is a partnership?
A business with two or more owners.
What is net cash flow?
The difference between total inflows and total outflows.
How does a cash flow forecast help decision-making?
It guides budgeting and investment decisions by predicting cash availability.
What is closing balance?
The amount of funds available at the end of the time period (usually a month).
What is an opening balance?
The amount of funds available at the start of the Time period(usually a month),
What is the break even point/level of output equation?
Fixed costs over selling price - variable cost per unit
