What teacher said (Business) Flashcards
Define e-commerce
The online buying and selling of goods and services suing computer systems linked to the internet and apps on the mobile phones
Current Ratio Formula
Current Assets/Current liabilities
1.25 = acceptable
1.5~2 = safe
less than 1 = can’t pay off short-term debts
greater than 2 = too much working capital/unprofitable
Acid test ratio formula
Current assets-Inventories/Current liabilities
1 = can pay off debts
0.75 = can’t pay off debts
Define Packaging
The physical container or wrapping of a product. It is also used for promotion and selling appeal
Define Entrepreneur
A person who organises, operates and takes the risk for a new business venture
Characteristic of successful entrepreneurs
- Hard working
- Risk taker
- Creative
- Optimistic
- Self-confident
- Innovative
- Effective communicator
Define Break-even chart
Graphs which show how costs and revenues of a business change with sales. They show the level of sales the business must make in order to break even
Define Customer Loyalty
When an existing customer continually purchase a product from the same business.
What are the functions of management
- Planning
- Organising
- Leading
- Commanding
- Coordinating
- Controlling
What is the Statement of Financial Position
It shows the value of a business’s assets and liabilities at a particular time.
What is good packaging
- Protect the product
- Allows the product to be used easily
- Suitable for transporting
- Promote the product/appeal to the customers
- Carry vital information about the product
Define Liquidity
The ability of a business to pay back its short-tern debts
Define assets
Those items of value which are owned by the business.
- Non-current (owned for more than one year)
- Current (owned and used within one year)
Define Liabilities
Debts owed by the business.
* Non-current (Long-term debts, repaid over more than one year)
* Current (Short-term debts, repaid in less than a year}
Total Shareholders’ equity Formula
Total assets-Total liabilities
Total asset=current assets+non-current assets
Total liabilities=current liabilities+non-current liabilities
