28 Terms

Question 1

Dividends

Answer 1

The part of profits that are given to shareholders

Question 2

Ethical

Answer 2

Morally correct behaviour

Question 3

Fair Trade

Answer 3

Buying raw materials at a price that allows supplies to have a reasonable standard of living

Question 4

Company Growth

Answer 4

The increase of revenue in a business

Question 5

Limited liability

Answer 5

Shareholders can only lose money invested in the company

Question 6

Market capitalisation

Answer 6

Market capitalisation = number of shares x share price

Question 7

Mission

Answer 7

The main purpose of an organisation

Question 8

Non-profit organisations

Answer 8

Incorporated organisations that have the purpose of servicing and helping society

Question 9

Objective

Answer 9

Short term goal e.g. 1 mil sales next month

Question 10

Private limited company

Answer 10

An LL business where shares are not freely available for sale and the owners can make decisions

Question 11

Private sector

Answer 11

Any organisation that is not run by government

Question 12

Profit

Answer 12

The diff between a firms revenue and total costs, a “reward” for risk and a return on capital invested

Question 13

Profit formula

Answer 13

Profit = revenue - costs

Question 14

Public sector organisations

Answer 14

Government owned organisations

Question 15

Public limited companies

Answer 15

Large firm, shares can be bought and sold by the general public on the stock exchange. Owners appoint managed to run the business

Question 16

Revenue

Answer 16

The income generated by sales of a product

Question 17

Revenue formula

Answer 17

Rev = price x quantity sold

Question 18

Share

Answer 18

Certificate indicating part ownership of a company and voting rights on how things are run

Question 19

Shareholder

Answer 19

Part-owners of a business who can vote and receive dividends

Question 20

Sole trader

Answer 20

An individual who runs a business. Operates under UL

Question 21

Business

Answer 21

An organisation that exists to provide goods and services

Question 22

The transformation process

Answer 22

Describes what happens inside the business. This is where value is added to inputs to create outputs

Question 23

Cell

Answer 23

Capital, Enterprise, land, labour

Question 24

Added value formula

Answer 24

AV = selling price - cost of bought in materials, components and services

Question 25

Smart

Answer 25

Specific, measurable, achievable, relevant, time bound

Question 26

Fixed costs

Answer 26

Costs that do not change directly with level of output

Question 27

Variable costs

Answer 27

Change directly with output. Increases by set amount each time new unit is made

Question 28

Total costs formula

Answer 28

Total cost = fixed costs + variable Costs