business planning and decision making Flashcards
what is meant by trading?
the action or activity of buying and selling goods and services
what is meant by break-even?
a business can be one of the following:
- making a profit
- making a loss
- breaking even (not making a profit or making a loss)
what does a business have to do to survive?
have enough money through sales to cover all expenses such as bills and staff wages
what is financial security?
the business is secure when it is earning enough revenue to fund itself. the business no long needs loans or personal savings
what is meant by market share?
market share is the percentage of a markets total sales earned by the business.
e.g there are 100 billion phones sold every year and apple has a market share of 60%
what is an objective?
an objective define a target for a business to achieve its aim.
whats a smart objective
- Specific
- Measurable
- Attainable
- Realistic
- Timed
descibe 4 factors that affect business aims and objectives
- changing the size of the workforce
- changing the size of the product range
- survival or growth
- entering or exiting markets
what is meant by swot analysis?
it is a tool used by a business to identify their:
- Strengths
- Weaknesses
- Opportunities
- Threats
what is revenue?
revenue is the total income earned within a set period. a.k.a sales and turn over
what are the 2 types of costs? and give an example
fixed costs and variable costs
examples of fixed costs
- rent
- salary
- insurance
- loans
examples of variable costs
- shipping cost
- raw materials
- packaging
what is profit?
profir is the differance between revenue and costs
profit=revenue-total costs
what is net cash-flow
net cash-flow = cash in flow - cash out flow
state 3 internal sources of internal finance
- personal savings
- selling assets
- reinvesting profits
state 8 external sources of finance
- overdraft
- venture capital
- trade credit
- higher purchase
- loan capital
- share capital
- crowdfunding
- leasing(rent)
