Unit 1 - What is business Flashcards
Gross Domestic Product (GDP)
It measures the total value of the production of an economy over a period of time
Mission Statement
Sets out a business’s overall purpose to direct and stimulate the entire organisation
Stakeholder
Individuals or groups who have an interest in a business
Revenue
The earnings or income generated by a firm as a result of its trading
Profit
The surplus of total revenue over total costs for a business over a trading period
Unlimited liability
Occurs when an individual or a group of individuals is personally, responsible for all the actions of their business
Limited liability
This means that in the event of financial difficulties, the personal belongings of shareholders are safe
Market capitalisation
The total value of the issued shares of a public limited company
Incorporation
A process of establishing a business as a separate legal identity that allows it to benefit from limited liability
Social enterprise
A business that has social aims and trades in order to benefit the community or society in general
Sole trader
A business that is owned and managed by one person, but it may employ other people
Demand
The amount of a product that consumers are willing and able to buy at any given price over a period of time
Interest rates
The price of borrowing money
Fair trade
A social movement that exists to promote improved trading terms and living conditions for producers in less-developed countries
Sustainable production
This occurs when the supply of a product does not impose costs on future generations by, for example, depleting non-renewable resources
