Theme 2 Managing Business Activities

Question 1

limited liability

Answer 1

the business owner or owners are only responsible for business debts up to the value of their financial investment into the business

Question 2

unlimited liability

Answer 2

the business owner or owners are personally responsible for all debts of the business

Question 3

business plan

Answer 3

a document which outlines what a business plans to achieve and how it plans to achieve it

Question 4

cash-flow forecast

Answer 4

used to predict the cash inflows for a business and cash outflows

Question 5

sales forecasting

Answer 5

involves a business using a range of techniques and information to predict future sales volume and value

Question 6

break-even output

Answer 6

the point at which the businesses revenue generated through sales of its products will cover total costs

Question 7

budget

Answer 7

a financial plan for the future

Question 8

statement of comprehensive outcome

Answer 8

a end of year financial statement that shows all of a businesses income and expenses over the previous twelve months

Question 9

profitability

Answer 9

a measure of a businesses profits relative to its expenses

Question 10

cash

Answer 10

the money that flows in and out of the business through a given period in time

Question 11

profit

Answer 11

whatever which remains from your revenue after costs are deducted

Question 12

balance sheet

Answer 12

a financial document that records the assets and liabilities of a business

Question 13

liquidity

Answer 13

the ability of a business to pay its debts and liabilities in cash when they fall due

Question 14

business failure

Answer 14

a business which ceases operations as they’re unable to make profit

Question 15

production

Answer 15

when raw materials or components are changed into products

Question 16

productivity

Answer 16

the amount of output that can be produced with a given input of resources in a specified time period

Question 17

efficiency

Answer 17

making the best use of all resources of a business

Question 18

capacity utilisation

Answer 18

the use that a business makes of its resources

Question 19

quality

Answer 19

the extent to which a product or operation meets its customer requirements

Question 20

total quality managment

Answer 20

a system of management based on quality being the priority throughout the organisation

Question 21

gdp

Answer 21

a measure of a country’s total output of goods and services over a period of times

Question 22

exchange rates

Answer 22

price of one currency expressed in terms of another

Question 23

interest rates

Answer 23

tells you the cost of borrowing or the return on savings

Question 24

competition

Answer 24

rivalry between several business selling similar products

Question 25

lean production

Answer 25

practices that reduce waste in the operational process

Question 26

quality control

Answer 26

checking goods after you make them or when they arrive from suppliers to see if anything is wrong with them

Question 27

quality assurace

Answer 27

introducing measures into the production process to try to ensure things dont go wrong in the first place

Question 28

quality circle

Answer 28

a small team who voluntaritly form to work on a specific issue or problem where qulaity is a concern

Question 29

kaizen

Answer 29

business Japanese philosophy that focus on gradually improving productivity and making a work environment more efficient

Question 30

working capital

Answer 30

the money available to fund a company’s day-to-day operations

Question 31

venture capital

Answer 31

type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential

Question 32

historical budgeting

Answer 32

a budgeting approach that focuses on past allocations and spending

Question 33

Swot analysis

Answer 33

a planning tool which seeks to identify the Strengths, Weaknesses, Opportunities and Threats involved in a project or organisation.

Question 34

batch production

Answer 34

occurs when many similar items are produced together

Question 35

job production

Answer 35

producing items that meet the specific requirements of the customer

Question 36

flow

Answer 36

a continuous and uninterrupted method of production

Question 37

cell

Answer 37

workers are organised into multi-skilled teams, with each team responsible for particular part of the production process

Question 38

labour turnover

Answer 38

the net departure of employees over a defined period of time