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Flashcards in Finance - Key Terms Deck (49):
1

Mechanism

When machinery is used, but labour is required the work it

2

Automation

When machinery is used and a computer controls it

3

Lean production

A Japanese production system, helps insure that was is kept to a minimum. On feature is JIT

4

Just-in-time (JIT)

Materials are not stored but are sued immediately when they arrive at the factory

5

Job production

Method of production involving production of each product individually, like a one-off

6

Batch production

Used when there are set stages, one stage has to be completed before the next can start

7

Flow/mass production

A continuous movement of items through the production process

8

Flow/mass production

A continuous movement of items through the production process

9

Flow/mass production

A continuous movement of items through the production process

10

Division of labour

The organisation of production into a number of specialised 'simple' repetitive processes

11

Specialisation

Occurs where workers specialise in carrying of simple production tasks

12

Process production

A series of automated processes, which when applied to a variety of raw materials, results in a large amount of a fined product

13

Added value

Increased worth of a product, i.e. Through branding, quality, convenience, service, design and USP

14

Added value

Increased worth of a product, i.e. Through branding, quality, convenience, service, design and USP

15

Efficiency

Maximising productivity with minimum wasted effort and expense

16

Total quantity management (TQM)

The process where all workers are responsible for quality throughout the process of production

17

Opportunity cost

The cost of missing out of something else

18

Internal/external finance

Comes from within/outside the business

19

Bank loan

Money borrowed from the bank for a stated purpose

20

Leasing

Obtaining an item for a time period, at the end of which the item is returned

21

Hire purchase

When you pay monthly for an item, the item becomes your when the (larger) final payment is made

22

Taking a new partner

Sell of part of the business for a new partner, they may bring new skills

23

Trade credit

When a business doesn't need to pay for a certain time period, 30, 60, 90 days

24

Trade credit

When a business doesn't need to pay for a certain time period, 30, 60, 90 days

25

Retained profit

Profit made that can be reinvested, stays within the business at all times

26

Sale of assets

Selling of assets to make cash

27

Mortgage

A loan used specifically to purchase a property

28

Overdraft

An agreement with the bank where a business can withdraw more than it has

29

Grants

An amount of money given to a business form the government, for a specific reason

30

Owner investment

When an owner may invest their own money for business development

31

Cash in bank

Money owned by a business that has been built up, used for whatever

32

Share issue

What limited company raises money by selling shares.

33

Fixed costs

Remain the same, regardless of output

34

Variable costs

Do change when output changes

35

Breakeven

The point at which sales at the same as costs

36

Margin of safety

The difference between the actual level of output and the breakeven point

37

Cash flow

The movement of money in and out of the business

38

Inflows/income

Money received by the businesses

39

Outflows/expenditure

Money paid out by the businesses

40

Net cash flow

The difference between the inflows and outflows

41

Opening/closing balance

The amount of money in a business account at any particular time, usually the beginning and end of the month

42

Gross profit

The amount of profit made by a businesses as a result of buying and selling goods or services, without paying for any of the day to day running costs

43

Net profit

The profit made as a result of buying and selling goods as well as costs of the day to day running costs

44

Expenses

A cost of running a business

45

Accounting

The process of keeping financial records

46

Profit margin

The ratio of profit over revenue, expressed as a percentage

47

Imports

Goods and services bought for other countries which leads to money going out of the UK

48

Exports

Goods and services which are sold to other countries and which lead to payments into the UK

49

Exchange rates (SPICED)

S trong
P ound
I mports
C heap
E xports
D ear (expensive)