1.3 Business Flashcards
(35 cards)
Aims:
a general statement of where you’re
heading, for example ‘to get to university’.
Market share:
the percentage of a market held
by one company or brand.
Objectives:
a clear, measurable goal, so
success or failure is clear to see.
SMART objectives:
targets that are specific,
measurable, achievable, realistic and time-bound.
Survival:
keeping the business going, which
ultimately depends on determination and cash.
Fixed costs:
costs that don’t vary just because
output varies, for example rent.
Interest:
the charges made by banks for the
cash they have lent to a business, for example six
per cent per year
Profit:
the difference between revenue and total
costs; if the figure is negative the business is
making a loss.
Revenue:
the total value of the sales made within
a set period of time, such as a month
Total costs:
all the costs for a set period of time,
such as a month.
Variable costs:
costs that vary as output varies,
such as raw materials.
Sales revenue=
price × quantity sold
Total costs =
variable costs + fixed costs
Profit = total revenue – total costs
total revenue – total costs
Break-even chart:
a graph showing a company’s
revenue and total costs at all possible levels of
output.
Break-even:
the level of sales at which total
costs are equal to total revenue. At this point
the business is making neither a profi t nor a
loss.
Margin of safety:
the amount by which demand
can fall before the business starts making losses.
Break-even output =
price – variable costs per unit
Margin of safety =
sales – break-even output
Cash:
the money the firm holds in notes and
coins, and in its bank accounts.
Cash flow:
the movement of money into and out
of the firm’s bank account.
Insolvency:
when a business lacks the cash to
pay its debts.
Overdraft:
the amount of the agreed overdraft
facility that the business uses.
Overdraft facility:
an agreed maximum level of
overdraft.
