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Business Definitions > Theme 2 > Flashcards

Theme 2 Flashcards

1
Q

What is working capital?

A

A measure of a business’ ability to meet day to day expenses.

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2
Q

What are loans?

A

A method of raising finance where a lender provides capital to a borrower and they agree to repay the money, with interest, over a period of time.

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3
Q

What is venture capital?

A

Investment from an already established business in return for a percentage of the new business.

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4
Q

What is leasing?

A

A method of raising finance through a contract that allows a business to benefit from the use of an asset without owning or buying it, like renting.

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5
Q

What is a business plan?

A

A document that describes how an entrepreneur proposes to set up a new business.

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6
Q

What is break-even?

A

The level of output at which the business makes neither a profit nor a loss.

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7
Q

What is buffer stock?

A

Part of stock control; stock held by a business to cope with unforeseen circumstances, e.g., sudden increase in demand.

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8
Q

What is just in time (JIT)?

A

A production technique that minimises the amount of stock held at each stage of production to help minimise costs.

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9
Q

What is quality control?

A

A form of quality management that involves checking over a good or service at the end of the process.

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10
Q

What is environmental protection?

A

An example of legislation that ensures a firm’s operations meet legally acceptable standards, e.g., environment act.

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11
Q

What is competition policy?

A

An example of legislation that promotes healthy competition in markets, leading to fair trade and giving consumers greater choice.

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12
Q

What is internal finance?

A

Funds used from within a business, which can be used to establish a business, e.g., owners capital or personal savings.

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13
Q

What is owners capital?

A

When an entrepreneur invests their own money into a business, e.g., from personal savings, showing confidence in the business.

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14
Q

What is retained profit?

A

Profit kept from within the business to help finance future activity.

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15
Q

What is sale of assets?

A

A method of raising short-term finance by disposing of a business asset in return for cash, helping improve short-term cash flow.

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16
Q

What is external finance?

A

Funds raised from investors, e.g., business angels or lenders.

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17
Q

What is share capital?

A

A method of raising finance by selling shares of the business, a form of equity capital.

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18
Q

What is an overdraft?

A

A method of raising finance that allows a business to withdraw money that is not in the account.

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19
Q

What are grants?

A

Fixed amounts given to the business from the government or organizations to fund a specified project.

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20
Q

What is limited liability?

A

An investor’s liability is limited to the amount invested or promised in share capital.

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21
Q

What is unlimited liability?

A

The owners of a business are responsible for the total amount of debt the business incurs, risking personal belongings.

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22
Q

What is sales forecasting?

A

The process of predicting future sale volumes and values based on market research or past sales data.

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23
Q

What is sales revenue?

A

Total amount of money coming into a business from the sales of a good or service in a specified period.

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24
Q

What are fixed costs?

A

Costs to a business that stay the same regardless of business input/output, e.g., rent.

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25
Q

What are variable costs?

A

Costs to a business that change in relation to output, e.g., raw materials.

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26
Q

What are budgets?

A

A target amount of money set by a business to be achieved in a specific period of time.

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27
Q

What is a zero based budget?

A

A type of budget where each department is set a budget of nothing and must justify any requests for expenditure.

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28
Q

What is gross profit?

A

Profit after cost of sales has been deducted and before expenses.

29
Q

What is liquidity?

A

A measure of a business’ ability to meet day to day expenses and short-term debts.

30
Q

What is business failure?

A

When a business is unable to continue to operate, which can be due to internal or external factors.

31
Q

What is job production?

A

Production of a one-off item to meet the needs of an individual customer.

32
Q

What is batch production?

A

Identical items are produced in small batches, using the same resources and passing through production at the same time.

33
Q

What is flow production?

A

A production process where items flow along the production line in a continuous flow.

34
Q

What is cell production?

A

A production process where the line is split into groups, each responsible for a certain area.

35
Q

What is productivity?

A

A measure of output per unit of input in a given period of time, e.g., output per worker.

36
Q

What is capital intensive production?

A

Production that uses a lot of capital when producing a good, e.g., machinery.

37
Q

What is labour intensive production?

A

Production that uses a lot of labour when producing a good, e.g., workers.

38
Q

What is capacity utilisation?

A

A measure of potential output that is being achieved, often a target for businesses.

39
Q

What is over-utilisation?

A

When a firm operates above full capacity, ‘sweating its assets’.

40
Q

What is stock control?

A

The method a business uses to maintain its level of stock, ensuring sufficient stock to meet demand while minimising costs.

41
Q

What is lead time?

A

The amount of time between placing an order and receiving the item.

42
Q

What is re-order level?

A

The level of stock that triggers an order for more to come in.

43
Q

What is lean production?

A

A type of production that focuses on cutting waste while maintaining quality.

44
Q

What is quality?

A

The ability of a good or service to meet customer expectations.

45
Q

What is quality management?

A

The process in which a business meets customer expectations, e.g., implementation of quality control systems.

46
Q

What is quality assurance?

A

A form of quality management that checks over a good or service at each stage of the process.

47
Q

What is kaizen?

A

A quality management technique that focuses on small and frequent improvements in every aspect of the production process.

48
Q

What is inflation?

A

A general rise in prices over a period of time or a fall in the power of money.

49
Q

What does SPICED stand for?

A

The acronym for what happens when a country is experiencing strong exchange rates.

50
Q

What does WPIDEC stand for?

A

The acronym for what happens when a country is experiencing weak exchange rates.

51
Q

What is appreciation?

A

Term for an increase in the value of a currency.

52
Q

What is depreciation?

A

Term for a decrease in the value of a currency.

53
Q

What are interest rates?

A

The price of money, i.e., the cost of borrowing or the reward of saving.

54
Q

What is taxation?

A

The process of imposing financial charges on businesses and individuals by the government.

55
Q

What is government spending?

A

The annual expenditure used by the government to supply goods and services.

56
Q

What is the business cycle?

A

Name this diagram.

57
Q

What is a boom?

A

Stage of the business cycle characterized by high levels of economic activity.

58
Q

What is a recession?

A

Stage of the business cycle where the rate of economic growth starts to fall, defined as two quarters of negative growth.

59
Q

What is a slump?

A

Stage of the business cycle characterized by serious economic decline.

60
Q

What is recovery?

A

Stage of the business cycle indicating signs that economic growth is rising.

61
Q

What is economic uncertainty?

A

The inability to predict exactly what will happen in the economic environment.

62
Q

What is legislation?

A

Laws created by the government to protect individuals and prevent consumer exploitation.

63
Q

What are consumer protection laws?

A

Example of legislation that protects consumers regarding the quality of goods, e.g., sale of goods act.

64
Q

What is employee protection?

A

Example of legislation that protects employees’ rights in the workplace.

65
Q

What is health and safety legislation?

A

Example of legislation where employers are responsible for looking after their employees in the workplace.

66
Q

What is a competitive environment?

A

The degree of competition in the market and the buying and selling power of consumers within it.

67
Q

What is a monopoly?

A

When one firm dominates the market.

68
Q

What is an oligopoly?

A

When a small number of firms dominate the market.

Business Definitions (4 decks)

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