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Yr 12 Business Studies - Theme 2 > Theme 2 - All Keyword definitions > Flashcards

Theme 2 - All Keyword definitions Flashcards

1
Q

Capital?

A

The money provided by the owners in a business.

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2
Q

Capital expenditure?

A

Spending in business resources that can be used repeatedly over a period of time.

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3
Q

Internal finance?

A

Money generated by the business or its current owners.

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4
Q

Retained profit?

A

Profit after tax that is ‘ploughed back’ into the business.

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5
Q

Revenue expenditure?

A

Spending on business resources that have already been consumed or will be very shortly.

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6
Q

Sale and leaseback?

A

The practice of selling assets, such as property or machinery, and leasing them back from the buyer.

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7
Q

Authorised share capital?

A

The maximum amount that can be legally raised.

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8
Q

Bank overdraft?

A

An agreement between a bank and a business that means the business can spend more money than it has in it’s account.

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9
Q

Capital gain?

A

The profit made from selling a share for more than it was bought.

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10
Q

Crowd funding?

A

Where a large number of individuals (the crowd) invest in a business on the internet, avoiding the use of a bank.

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11
Q

Debenture?

A

A long-term loan to the business.

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12
Q

Equities?

A

Another name for an ordinary share.

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13
Q

External finance?

A

Money raised from outside the business.

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14
Q

Issued share capital?

A

Amount of current share capital arising from the sale of shares.

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15
Q

Lease?

A

A contract to acquire the use of resources such as property and equipment.

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16
Q

Peer-to-peer lending(P2PL)?

A

Where individuals lend to other individuals without prior knowledge of them, on the internet.

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17
Q

Permanent capital?

A

Share capital that is never repaid by the company.

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18
Q

Secured loans?

A

A loan where the lender requires security, such as property, to provide protection in case the borrower defaults.

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19
Q

Share capital?

A

Money introduced into the business through the sale of shares.

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20
Q

Unsecured loans?

A

Where the lender has no protection of the borrower fails to repay the money owed.

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21
Q

Venture capitalism?

A

Providers of funds for small to medium-sized businesses that may be considered too risky for other investors.

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22
Q

Collateral?

A

An asset that might be sold to pay a lender when a loan can’t be repaid.

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23
Q

Incorporated business?

A

A business model in which the business and the owner has separate legal identities.

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24
Q

Limited liability?

A

A legal status that means shareholders can only lose the original amount they invested in a business.

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25
Q

Long-term finance?

A

Money borrowed for more than one year?

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26
Q

Rights issue?

A

Issuing new shares to existing shareholders at a discount.

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27
Q

Short-term borrowing?

A

Money borrowed for 12 months or less.

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28
Q

Undercapitalised?

A

A business not raising enough capital when setting up.

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29
Q

Unincorporated business?

A

A business model in which there’s no legal difference between the owner and the business.

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30
Q

Unlimited liability?

A

A legal status which means that business owners are liable for all business debts.

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31
Q

Business plan?

A

A plan for the development of a business, giving details such as the products to be made, resources needed and forecasts like costs and revenue.

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32
Q

Cash-flow forecast?

A

The prediction of all expected receipts and expenses of a business over a future time period which shows the expected cash balance at the end of each month.

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33
Q

Cash inflows?

A

The flow of money into a business.

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34
Q

Cash outflows?

A

The flow of money out of a business.

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35
Q

Net cash flow?

A

The difference between the cash flowing in and the cash flowing out of a business in a given time period.

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36
Q

Solvency?

A

The degree to which a business is able to meet its debts when they fall due.

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37
Q

Consumer income?

A

The amount of income remaining after taxes and expenses have been deducted from wages.

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38
Q

Consumer trends?

A

The habits or behaviours of consumers that determine the goods and services they buy.

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39
Q

Economic growth?

A

The rise in output of an economy as measured by the Growth Domestic Product (GDP) usually as a percentage.

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40
Q

Economic variables?

A

Measures within the economy which have effects on the business and consumers leg unemployment and inflation.

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41
Q

Extrapolation?

A

Forecasting future trends based on past data.

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42
Q

Forecasting?

A

A business process, assessing the possible future outcomes.

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43
Q

Sales forecast?

A

Projection of future sales revenue, often based on previous sales data.

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44
Q

Time series data?

A

A method that allows a business to predict future levels from past figures.

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45
Q

Average cost?

A

The cost of producing one unit, calculated by total cost divided by output.

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46
Q

Fixed cost?

A

A cost that doesn’t change as a result of a change in output in the short run.

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47
Q

Long run?

A

The time period where all factors of production are variable.

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48
Q

Profit?

A

The difference between total costs and total revenue.

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49
Q

Sales revenue?

A

The value of output sold in a particular time period.

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50
Q

Sales volume?

A

The quantity of output sold in a particular time period.

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51
Q

Semi-variable cost?

A

A cost that consists of both fixed and variable elements.

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52
Q

Short run?

A

The time period where at least one factor of production is fixed.

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53
Q

Total cost?

A

The entire cost of producing a given level of output.

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54
Q

Total revenue?

A

The amount of money the business receives from selling output.

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55
Q

Variable cost?

A

A cost that rises as output rises.

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56
Q

Break-even?

A

When a business generates just enough revenue to cover its total costs.

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57
Q

Break-even chart?

A

A graph containing the total cost and total revenue lines, illustrating the break-even output.

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58
Q

Break-even output?

A

The output a business needs to produce so that its total revenue and total costs are the same.

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59
Q

Break-even point?

A

The point at which total revenue and total costs are the same.

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60
Q

Contribution?

A

The amount of money left over variable costs have been subtracted from revenue.

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61
Q

Margin of safety?

A

The range of output between the break-even level and the current level of output, over which a profit is made.

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62
Q

Budget?

A

A quantitative economic plan prepared and agreed in advance.

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63
Q

Budgetary control?

A

A business system that involves making future plans, comparing the actual results with the planned results and investigating the causes of any differences.

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64
Q

Historical figures?

A

Quantitative information based on past trading records.

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65
Q

Production cost budget?

A

A firm’s planned production costs for a future period of time.

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66
Q

Sales budget?

A

A firm’s planned sales for a future period of time, which can be measured in either revenue or volume.

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67
Q

Variance?

A

The difference between actual financial outcomes and those budgeted.

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68
Q

Variance analysis?

A

The process of calculating variances and attempting to identify their causes.

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69
Q

Zero-based budgeting?

A

A system of budgeting where no money is allocated for costs or spending unless they can be justified by the fund holder.

70
Q

Amortisation?

A

The writing off of an intangible asset.

71
Q

Cost of sales?

A

The direct costs of a business.

72
Q

Exceptional costs?

A

A one-off cost, such as a large bad debt.

73
Q

Gross profit?

A

The difference between revenue and cost of sales.

74
Q

Gross profit margin?

A

Gross profit expressed as a percentage of revenue.

75
Q

Operating profit?

A

The difference between gross profit and business overheads, such as selling and administrative expenses.

76
Q

Operating profit margin?

A

Operating profit expressed as a percentage of revenue.

77
Q

Net profit?

A

The difference between operating profit and interest.

78
Q

Net profit margin?

A

Net profit before tax, expressed as a percentage of revenue.

79
Q

Statement of comprehensive income?

A

A financial document showing a company’s income and expenditures over a particular time period, usually one year.

80
Q

Revenue or turnover?

A

The total income of a business resulting from sales of goods or services.

81
Q

Acid test ratio?

A

Similar to the current ratio but excludes stocks from current assets.

82
Q

Assets?

A

Resources that belong to a business.

83
Q

Capital?

A

Money out into the business by the owners.

84
Q

Current assets?

A

Liquid assets i.e those assets that will be converted into cash within one year.

85
Q

Current liabilities?

A

Money owed by the business that must be repaid within one year.

86
Q

Current ratio?

A

Assesses whether or not a business has enough resources to meet any debts that arise in the next 12 months.

87
Q

Intangible assets?

A

Non-physical assets, such as brand names, patents and customer lists.

88
Q

Inventories?

A

Stocks, such as raw materials and finished goods held by a business.

89
Q

Liabilities?

A

Money owed by the business to banks and suppliers.

90
Q

Liquidity?

A

The ease with which assets can be converted into cash.

91
Q

Net assets?

A

Total assets- total liabilities.

92
Q

Non-current assets?

A

Long-term resources that will be used by the business repeatedly over a period of time.

93
Q

Non-current liabilities?

A

Money owed by the business for more than a year, sometimes called long-term liabilities.

94
Q

Shareholders equity?

A

The amount of money owed by the business to the shareholders.

95
Q

Statement of financial position (balance sheet)?

A

A summary at a particular point in time of the value of a firm’s assets, liabilities and capital.

96
Q

Trade and other payables?

A

Money owed to the business by customers and any prepayments made by the business.

97
Q

Trade and other receivables?

A

Money owed to the business by customers and any prepayments made by the business.

98
Q

Working capital?

A

The funds left over to meet day-to-day expenses after current debts have been paid.

Current liabilities - Current assets.

99
Q

Administration?

A

A failing business appoints a specialist to rescue the business or wind it up.

100
Q

External factors?

A

Factors behind the control of the business that cause it to collapse.

101
Q

Internal factors?

A

Factors that businesses are able to control that cause it to collapse.

102
Q

Overtrading?

A

The situation where a business doesn’t have enough cash to support its production and sales, usually because it’s growing too fast.

103
Q

Batch production?

A

A method that involves completing one operation at a time on all units before performing the next.

104
Q

Capital intensive?

A

Production methods that make more use of machinery relative to labour.

105
Q

Capital productivity?

A

The amount of output each unit of capital produces.

106
Q

Cell production?

A

Involves producing a family of products in a small self-contained unit within a factory.

107
Q

Division of labour?

A

An individual’s certain special skill in a task.

108
Q

Downsizing?

A

The process of reducing capacity, usually by laying off staff.

109
Q

Efficiency?

A

Producing a level of output where average cost is minimised.

110
Q

Flow production?

A

Large-scale production of a standard product, where each operation on a unit is performed continuously one after the other.

111
Q

Job production?

A

A method that involves employing all factors to complete one unit of output at a time.

112
Q

Kaizen?

A

A Japanese term that means continuous improvement.

113
Q

Labour intensive?

A

Production methods that make more use of labour relative to machinery.

114
Q

Labour productivity?

A

The amount of output each unit of labour produces.

115
Q

Lean production?

A

An approach to operations that focuses on the reduction of resource use.

116
Q

Outsourcing?

A

Giving work to sub-contractors that reduce costs.

117
Q

Production?

A

The transformation of resources into goods or services.

118
Q

Productivity?

A

The output per unit of input per time period.

119
Q

Specialisation?

A

In business, the production of a limited range of goods.

120
Q

Standardisation?

A

Using uniform resources as activities or producing a uniform product.

121
Q

Capacity utilisation?

A

The use that a business makes of its resources.

122
Q

Excess or surplus capacity?

A

When a business has too many resources, such as labour or capital, to produce its desired level of output.

123
Q

Full capacity?

A

The point where a business can’t produce any more output.

124
Q

Mothballing?

A

Leaving machines, equipment or building space unused but maintained so they can be brought into use if necessary.

125
Q

Over-utilisation?

A

The position where a business is running at full capacity and ‘straining’ resources.

126
Q

Rationalisation?

A

Reducing the number of resources, particularly labour or capital and put into the production process.

127
Q

Under-utilisation?

A

The position where a business is producing less than full capacity.

128
Q

Buffer stocks?

A

Stocks held as a precaution to cope with unforeseen demand.

129
Q

Kanban?

A

A card or an object that acts as a signal to move or provide resources in a factory.

130
Q

Lead time?

A

The time between placing the order and the delivery of goods.

131
Q

Re-order level?

A

The level of current stock when new orders are placed.

132
Q

Re-order quantity?

A

The amount of stock ordered when an order is placed.

133
Q

Stock rotation?

A

The flow of stock into and out of storage.

134
Q

Work-in progress?

A

Partly finished goods.

135
Q

Quality?

A

Features of a product that allow it to satisfy customers’ needs.

136
Q

Quality assurance?

A

A method of working for businesses that takes into account customers’ wants when standardising quality.

137
Q

Quality chains?

A

When employees form a series of links between customers and suppliers in business, both internally and externally.

138
Q

Quality circles?

A

Groups of workers meeting regularly to solve problems and discuss work issues.

139
Q

Quality control?

A

Making sure that the quality of a product meets specified quality performance criteria.

140
Q

Statistical process control?

A

The collection of data about the performance of a particular process in a business.

141
Q

Total quality management?

A

A managerial approach that focuses on quality and aims to improve the effectiveness, flexibility and competitiveness of the business.

142
Q

Appreciation of a currency?

A

A rise in the value of a currency.

143
Q

Base rate?

A

The rate of interest around which a bank structures other interest rates.

144
Q

Boom?

A

The peak of the economic cycle where GDP is growing at its fastest.

145
Q

Consumer price index (CPI)?

A

A common measure of price changes used in the EU.

146
Q

Deflation?

A

A fall in the general price level.

147
Q

Depreciation?

A

A fall in the value of a currency.

148
Q

Downturn?

A

A period in the economic cycle where GDP grows, but more slowly.

149
Q

Economic, trade or business cycle?

A

Regular fluctuations in the level of output in the economy.

150
Q

Exchange rate?

A

The price of one currency in terms of another.

151
Q

Fiscal policy?

A

Using changes in taxation and government expenditure to manage the economy.

152
Q

Government expenditure?

A

The amount spent by the government in its provision of public services.

153
Q

Gross domestic product (GDP)?

A

A common measure of national income, output or employment.

154
Q

Index linked?

A

The linking of certain payments, such as payments, to the rate of inflation.

155
Q

Inflation?

A

A general rise in prices.

156
Q

Monetary policy?

A

Using changes in the interest rate and money supply to manage the economy.

157
Q

Recession?

A

A less sever form of depression?

158
Q

Recover?

A

A period where economic growth begins to increase again after a recession.

159
Q

Slump or depression?

A

The bottom of the economic cycle where GDP starts to fall with significant increases in unemployment.

160
Q

Taxation?

A

The charges made by government on the activities, earnings and income of businesses and individuals.

161
Q

Anti-competitive or restrictive practices?

A

Attempts by firms to prevent or restrict competition.

162
Q

Barriers to entry?

A

Obstacles that make it difficult for new firms to enter a market.

163
Q

Collusion?

A

Two (or more) businesses agreeing to a restrictive practice, such as price fixing.

164
Q

Contract of employment?

A

A written agreement between an employer an an employee in which each has certain obligations.

165
Q

Discrimination?

A

Favouring one person over another.

166
Q

Employment tribunal?

A

A court that deals with cases involving disputes between employers and employees.

167
Q

National minimum wage?

A

A wage rate set by the government below which it’s illegal to pay people at work.

168
Q

Unfair dismissal?

A

The illegal dismissal of a worker by a business.

169
Q

Barriers to entry?

A

Factors which make it difficult or impossible for businesses to enter a market and compete with existing producers.

170
Q

Cartel?

A

A group of businesses (or countries) which join together to agree on pricing and output in a market in an attempt to gain higher profits at the expense of customers.

171
Q

Colluding?

A

Where several businesses make agreements among themselves which benefit them at the expense of either rival businesses or customers.

172
Q

Market structures?

A

The characteristics of a market, such as the side of barriers to entry to the market, the number of businesses in the market or the behaviours of businesses in the market.

Yr 12 Business Studies - Theme 2 (13 decks)

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