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Business Studies A2 > Unit 3 > Flashcards

Unit 3 Flashcards

1
Q

What are functional objectives?

A

A quantifiable statement of a department’s goals which should enable it to contribute to the achievement of the business objective

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2
Q

What is a corporate objective?

A

A quantifiable statement of a business’s goals which should include measurable targets

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3
Q

What is a functional strategy?

A

The plan by which the department intends to achieve its functional objectives on a day-to-day basis.

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4
Q

What are SMART targets?

A
  • specific
  • measurable
  • agreed
  • realistic
  • time based
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5
Q

What are cash-flow targets?

A

A financial objective focuses on maintaining a healthy cash balance

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6
Q

What is cost minimisation?

A

The process by which businesses attempt to maximise profits by keeping costs low

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7
Q

What are ROCE targets?

A

The minimum percentage return a business wants to achieve from the capital employed in business activities

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8
Q

What are shareholder’s returns?

A

The financial rewards to a shareholder in return for their investment; this can include dividends and increased share value

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9
Q

What is satisficing?

A

Aiming to achieve a satisfactory level of profit

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10
Q

What is an executive director?

A

A member of the board of directors who also holds a position of responsibility in the business on a day to day basis, for example a marketing director

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11
Q

What is a Non-executive director?

A

A member of the board of directors who does not work for the business on a day to day basis but sits on the board in an advisory role

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12
Q

What is an income statement?

A

A financial document that summarises a business’ trading activity and expenses to show whether it has made a profit or a loss

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13
Q

What is gross profit?

A

Profit after cost of sales has been deducted

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14
Q

What is operating profit?

A

Profit after all other expensive a have been deducted, also referred to as net profit

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15
Q

What is a gross profit margin?

A

Gross profit expressed as a percentage of sales revenue

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16
Q

What is an Operating profit margin

A

Operating profit expressed as a percentage of sales revenue

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17
Q

What is profit quality?

A

The sustainability of profit

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18
Q

What is profit utilisation?

A

How profit is being used, i.e whether it is being ploughed back into the business or distributed to shareholders

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19
Q

What is a balance sheet?

A

A financial document that summarises the net worth of a business - it balances total assets with total equity and liabilities

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20
Q

What are inventories?

A

The IFRS term for stocks

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21
Q

What is total equity?

A

The total amount of money being utilised in the business from share capital and retained profit

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22
Q

What are no-current assets?

A

Items of value owned by the business that are likely to be kept for more than one year

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23
Q

What are current assets?

A

Resources owned by the business whose value varies as a result of daily business activities, e.g cash, inventories

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24
Q

What are intangible assets?

A

Assets without physical form such as goodwill or brand names

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25
Q

What are current liabilities?

A

Financial obligations of the business payable within 12 months

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26
Q

What are Non-current liabilities?

A

Debts that the business has more than one year to repay

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27
Q

What are net current liabilities?

A

Current liabilities minus current assets

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28
Q

What are net assets?

A

Total assets minus total liabilities

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29
Q

What are net current assets?

A

Current assets minus current liabilities

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30
Q

What is working capital?

A

A measure of a firm’s ability to meet day-to-day expenses

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31
Q

What is depreciation?

A

An accounting practice which allows the value of a fixed asset to be spread over its useful life

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32
Q

What are trade receivables?

A

Amounts owed by debtors to the business

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33
Q

What is a debtor?

A

Someone who owes the business money, i.e a customer who has not yet paid

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34
Q

What are trade payables?

A

Amounts owed by the business to creditors

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35
Q

What is a creditor?

A

Someone the business owes money to, i.e a supplier who has not yet been paid

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36
Q

What is liquidity?

A

A business’s ability to meet short-term cash payments on time

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37
Q

What is a current ratio?

A

A measure of the ability of a business to meet short-term debts from current assets

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38
Q

What is the acid test ratio?

A

A measure of the ability of a business to meet short-term debts from liquid assets

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39
Q

What is profitability?

A

The relationship between business’s profits and sales revenues

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40
Q

What is ROCE?

A

a measure of how efficiently a business is using its capital to generate profits

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41
Q

What is asset turnover?

A

A measure of how effectively a business is using its assets to generate sales

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42
Q

What is capital employed?

A

The total capital invested in the business from long-term sales

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43
Q

What is inventory turnover?

A

A measure of how many times per year a business turns over its stock through sales

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44
Q

What are payable days?

A

A measure of the average number of days taken to pay suppliers

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45
Q

What are receivable days?

A

A measure of the average number of days taken by a business to collect its debts from customers

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46
Q

What is a gearing ratio?

A

The percentage of capital employed that comes from non-current liabilities

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47
Q

What are shareholder ratios?

A

Ratios that help measure the value of the return received by shareholders

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48
Q

What are dividends per share?

A

The number of pence per share received by shareholders

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49
Q

What is a dividend yield?

A

A measure of the return received on an investment, expressed as a percentage of the current market price of the share

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50
Q

What is a financial strategy?

A

The long-term financial plan of action to achieve the financial objectives of the business

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51
Q

What are sources of finance?

A

The range of options available to firms to fund business operations including banks, venture capitalists and share capital

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52
Q

What are rights issues?

A

Selling new issues of shares to existing shareholders in a company so that their control over the business is not changed

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53
Q

What are profit centres?

A

A section of a business for which costs and revenues and therefore profit can be identified

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54
Q

What is capital expenditure?

A

The purchase of assets that will remain in the business in the medium to long term, accounted for in the balance sheet

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55
Q

What is investment appraisal?

A

The process of analysing the financial merits of a possible future investment

56
Q

What is payback?

A

How long it will take to recoup the cost of an initial investment

57
Q

What is ARR?

A

Average annual profit expressed as a percentage of initial investment

58
Q

What is NPV?

A

The total net return of an investment stated in today’s monetary value

59
Q

What is a discount factor?

A

The rate by which future cash flows are reduced (discounted) to reflect current interest rates

60
Q

What is time value money?

A

Recognition of the fact that £1 today is worst more than £1 in the future due to a fall in its purchasing power

61
Q

What is investment criteria?

A

A pre-determined target against which to judge an investment

62
Q

What are marketing objectives?

A

The goals of the marketing function which come from, and are designed to help achieve, the corporate objectives

63
Q

What is market analysis?

A

A detailed examination of the features of a market such as market size and sales used to predict future trends

64
Q

What is a moving average?

A

A technique for identifying an underlying trend by smoothing out fluctuations in data

65
Q

What is a trend?

A

A general direction in which something tends to move e.g sales are increasing

66
Q

What is an extrapolation?

A

A prediction of a future trend based on an identified current trend

67
Q

What is a correlation?

A

An apparent (statistical) relation between two factors (variables) which can be either positive or negative

68
Q

What is marketing data?

A

Information gathered about the response to the marketing activities of a business

69
Q

What is a test market?

A

Launching a product in a relatively small, well-defined segment or region of the market to test sales levels before a full-scale launch

70
Q

What is ansoff’s matrix?

A

A way of classifying marketing strategies in terms of existing and new products in existing and new markets

71
Q

What is market penetration?

A

When a firm increases the sales of its current products to existing customers or attracts new customers from its competitors in the market

72
Q

What is product development?

A

Offering new and improved products to existing markets

73
Q

What is market development?

A

Finding new markets for existing products either by selling abroad or by identifying a new segment of the domestic market

74
Q

What is diversification?

A

Offering a new product in a new market

75
Q

What is a marketing plan?

A

Written details of the activities to be used to carry out the marketing strategy

76
Q

What is SWOT analysis?

A

A method of analysing the current situation by examining the internal strengths and weaknesses of the business and the opportunities and threats of the external environment

77
Q

What is situation analysis?

A

An assessment of the business, its customers, competitors, and the market environment

78
Q

What are marketing tactics?

A

The marketing mix activities (price, place, product, promotion) undertaken to achieve a chose marketing strategy

79
Q

What are operational objectives?

A

Targets set in relation to the production process or provision of a service within a given financial year

80
Q

What are quality, cost and volume targets?

A

Operational objectives which set a minimum acceptable standard of provision measured by cost, quality or volume

81
Q

What is innovation?

A

The launch of a new product or process, an invention, onto the market for commercial gain

82
Q

What are efficiency targets?

A

Operational objectives which set a minimum acceptable standard of provision in relation to efficiency

83
Q

What are environmental targets?

A

Operational objectives which set a minimum acceptable standard of provision in relation to the environment

84
Q

What is benchmarking?

A

A management tool which aims to increase performance by identifying, investigating and adopting aspects of best practise from other firms

85
Q

What are economies of scale?

A

The benefits enjoyed by a firm as a result of operating on a large scale, leading to a fall in average costs

86
Q

What are diseconomies of sale

A

The disadvantages experienced by a firm as a result of operating beyond optimum output, leading to a rise in average costs

87
Q

What are purchasing economies?

A

Benefit of buying on a large scale leading to lower average costs from suppliers

88
Q

What are technical economies?

A

Ability of larger firms to buy technically advanced equipment and spread the cost over a larger number of units

89
Q

What is specialisation?

A

The ability to employ specialists, e.g accountants, and for staff to focus on one particular area of function

90
Q

What is an average cost?

A

Total cost divided by the number of unites produced to give cost per item

91
Q

What is a communication dis economy?

A

The breakdown in effective communication resulting from an increase in size of operations

92
Q

What is a coordination diseconomy?

A

the breakdown in effective coordination resulting from an increase in size of operations

93
Q

What is a resource mix?

A

The combination of capital and human resources utilised within a business to achieve the required output

94
Q

What is an optimum resource mix?

A

The combination of capital and human resources which allows for the greatest efficiency

95
Q

What is capital intensive?

A

Businesses that rely more heavily upon capital equipment, e.g machinery and computers rather than labour

96
Q

What is labour intensive?

A

Business that rely more heavily upon labour, i.e the workforce rather than capital equipment

97
Q

What is research and development?

A

The scientific research and technological development of a new product or process

98
Q

What is idea generation?

A

The process of identifying a wide range of possible new ideas

99
Q

What is idea screening?

A

The process of streamlining all the ideas generated to shortlist those worthy of further consideration

100
Q

What is concept testing?

A

The process of pitching potential ideas to consumer panels to assess their reactions

101
Q

What is business analysis?

A

The process of investigating the economic and practical viability of an idea

102
Q

What is innovation?

A

The launch of a new product or process, an invention, onto the market for commercial gain

103
Q

What is optimal location?

A

A business location that gives the best combination of quantitative and qualitative factors

104
Q

What are quantitative factors?

A

These are measurable in financial terms and will have a direct impact on either the costs of a site of the revenues from it and it’s profitability

105
Q

What are qualitative factors?

A

Non-measurable factors that may influence business decisions

106
Q

What is a stakeholder?

A

Any person or group that has an interest in the activities of a business, e.g community, workers, suppliers, customers, government

107
Q

What are multisite locations?

A

A business that operates from more than one location

108
Q

What is off-shoring?

A

The relocation of a business process done in one country to the same or another company in another county

109
Q

What is multinational?

A

A business with operations or production bases in more than one country

110
Q

What are trade barriers?

A

Taxes (tariffs) or other limitations on the free international movement of goods and services

111
Q

What is lean production?

A

The adoption of techniques that help to reduce waste

112
Q

What is just-in-time?

A

A lean production technique which aims to minimise stock holdings

113
Q

What is kaizen?

A

A lean production technique which aims to improve efficiency by making small but frequent improvements, also know as continual improvement

114
Q

What is time based management?

A

Managing resources effectively to ensure products are fit for market in the shortest time possible

115
Q

What is critical path analysis?

A

A technique for planning complex projects to allow them to be completed in the shortest time possible by identifying activities that can be carried out simultaneously

116
Q

What is a critical path network?

A

A visual representation of the sequencing and timing of all the activities involved in completing a complex project

117
Q

What is EST?

A

The earliest start time an activity can start in a project upon the completion of a preceding activity

118
Q

What is the LFT?

A

The latest finish time an activity must be completed by to avoid any delay to the project

119
Q

What is a critical path?

A

The route which outlines all those activities that cannot be delayed, i.e have zero float time, of the project is to be completed on time

120
Q

What are critical activities?

A

Those activities with zero float time, i.e if it takes four weeks to complete, there is only four weeks to complete, there is only four weeks between the EST and LFT

121
Q

What is float time?

A

The amount of time by which a non-critical activity could be delayed without having an effect on the whole project

122
Q

What are non-critical activities?

A

Those activities with float time, i.e if it takes four weeks to complete, there may be six weeks between the EST and LFT

123
Q

What is human resource management?

A

Making the best use of all employees to achieve corporate goals

124
Q

What are HR objectives?

A

Targets the HR management hopes to achieve by implementing HR strategies, so that the business can achieve its corporate objectives

125
Q

What is ‘soft’ HR management?

A

Concerned with communication and motivation, people are led rather than managed. They are involved in determining and realising strategic objectives

126
Q

What is ‘hard’ HR management?

A

Emphasises costs and places control firmly in the hands of management. Their role is to manage numbers effectively, keeping the workforce closely matched with requirements in terms of both bodies and behaviour

127
Q

What is workforce planning?

A

Getting ‘the right number of people with the right skills, experiences, and competencies in the right jobs at the right time.’ A comprehensive process that provides managers with a framework for making staffing decisions based on an organisation’s corporate objectives, strategic plan, budgetary resources, and a set of desired workforce skillsl

128
Q

What are workforce plans?

A

Details of how the business will implement its HR management policies

129
Q

What is centralisation?

A

Where the decision-making authority is concentrated amongst a small number of senior managers at the top/centre of the organisational structure

130
Q

What is decentralisation?

A

Where the authority for decision-making is delegated to subordinates in the organisational structure

131
Q

What is delayering?

A

Removing levels in the organisational structure

132
Q

What are peripheral workers?

A

Part-time, temporary and self-employed workers brought into the business as and when needed

133
Q

What is a flexible workforce?

A

Where a significant percentage of employees are on part-time and temporary contracts rather than the vast majority being on permanent, full-time contracts, and/or where employees are multiskilled and work wherever needed in the organisation

134
Q

What are core workers?

A

Full time, permanent employees, with business-specific skills and knowledge, performing tasks key to the success of the business, often rewarded with high salaries and excellent working conditions

135
Q

What is outsourcing?

A

Where business functions are provided by external specialist organisations rather than provided in house

136
Q

What is home working?

A

Where employees can perform their job from home, increasingly linked to their employer via the Internet

Business Studies A2 (1 decks)

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