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Business > Flash cards to date (21/6/24) > Flashcards

Flash cards to date (21/6/24)

(76 cards)

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1
Q

Define Limited Liability

A

When a business owner has a separate legal identity to their business so their personal assets are not at risk

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2
Q

Define Unlimited Liability

A

When a business owner has the same legal identity as their business so their personal assets are at risk

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3
Q

Define Sole Trader

A

Where a business is started and owned by one person who keeps all the profits,
but holds all the responsibilities

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4
Q

Define Partnership

A

Where a business is started and owned by more than one person, who then share the profits and the responsibilities

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5
Q

Define Shareholder

A

An owner of a company who receives a dividend as a return for their investment

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6
Q

Define Private Limited Company

A

A business with limited liability that sells shares to friends and family

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7
Q

Define Public limited company

A

A business with limited liability that sells shares on the stock exchange

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8
Q

Define Stock market

A

Where investors can buy and sell ownership of investible assets such as stocks or equities which represent fractional ownership in a company

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9
Q

Define Market growth

A

The percentage growth in the size of the market measured over a specific period

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10
Q

Define Market share

A

The percentage of total sales a business’ particular good or service has

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11
Q

Define percentage change

A

The relative difference between an old value and a new value

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12
Q

Define capital expenditure

A

Funds spent by a company to acquire or upgrade a long term asset

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13
Q

Investment capital

A

The expenditure of money to fund a company’s long term growth

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14
Q

Define working capital

A

The amount of money a business has for carrying out its day to day functions

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15
Q

Define Internal sources of finance

A

Sources of finance that come from within the business

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16
Q

Define external sources of finance

A

Sources of finance that come from outside of the business

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17
Q

Define short term sources of finance

A

business finance in the short term (typically less than a year)

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18
Q

Define long term sources of finance

A

Business finance in the long term (over a year)

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19
Q

Define owner’s capital

A

Money invested into the business by the owner

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20
Q

Define Retained profit

A

Money generated by the business that is kept in the business

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21
Q

Define sale of assets

A

when established businesses sell assets that are no longer required

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22
Q

Define overdraft

A

Source of finance for a business where it is allowed to take more money out of its account
than it has deposited

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23
Q

Define Trade credit

A

When a business orders and receives supplies, but pays for them at a later date

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24
Q

Define Debt factoring

A

When a business sells its unwanted debts to debt factoring business

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25
Define bank loan
Source of finance for a business where they receive a fixed amount of money for a specified time, which will need repayment with interest
26
Define Share capital
The money raised by a business from the sale of shares
27
Define venture capital
A source of finance normally for small businesses with good growth prospects, where the venture capitalist normally takes a stake in the business
28
Define Hire purchase
when a business agrees a contract to acquire an asset by paying an initial instalment and repays the price of the asset plus interest over a period of time
29
Define Leasing
the business pays a regular amount over a period of time but the item belongs to the leasing company
30
Define commercial mortgage
a sum of money that is borrowed from the bank that is secured against a business property and payed back in instalments over a long period of time
31
Define Government grant
a fixed amount of money awarded by the government or charitable organisations
32
Define sale and leaseback
when a business sells an asset but leases the same asset back from its new owner
33
Define revenue
the income from sales
34
Define Fixed costs
Costs that do not vary with output
35
Define variable costs
Costs that vary with output
36
Define profit
The difference between revenue and costs
37
Define cost per unit
the amount of money spent by a business when producing a single unit of a product
38
Define semi variable cost
expenses that include both fixed and variable cost components
39
Define direct costs
a cost that is directly tied to the production of a good or service
40
Defne indirect costs
costs that do not relate to a specific good or service
41
Define break even
Where total revenue is the same as total costs and no profit or loss is made
42
Define contribution per unit
the difference between the sale price of a product and the variable costs incurred for it
43
Define Total contribution
the difference between total sales revenue and total variable costs
44
Define Margin of safety
The additional output that a business produces or expects to produce more than its breakeven output
45
Define stakeholder
Anyone with interest in the business
46
Define Trade receivables
customers who owe the business money
47
Define trade payables
The money the business owes to suppliers
48
Define Working capital cycle
the time it takes to convert the total net working capital into cash
49
Define over trading
when a business expands too quickly and runs into cash flow problems
50
Define equity
the ordinary share capital of a business
51
Define Debt
when a business owes someone money
52
Define Cash flow
a company's sources and uses of cash over time
53
Define cash flow forecast
the predicted movement of money in and out of a business over a period of time
54
Define cash inflow
money coming into the business
55
Define cash outflow
money going out of the business
56
Define liquidity
when an asset is converted into cash
57
Define Net cash flow
The difference between total inflows and outflows
58
Define opening balance
The amount of money a business has at the start of the month
59
Define closing balance
The amount of money a business has at the end of the month
60
Define seasonal demand
fluctuations in output and sales related to the season of the year
61
Define income statement
A statement that shows a company's profit and loss over a period of time
62
Define Cost of sales
the costs that go into providing a service or a product for a customer
63
Define Gross profit
the difference between revenue and cost of sales
64
Define net profit
the difference between gross profit and expenses
65
Define expenses
a cost of operations that a company incurs to generate revenue
66
Define gross profit margin
the percentage profit made on sales not taking into account expenses
67
Define net profit margin
the percentage profit after all costs and expenses have been deducted
68
Define Ratio analysis
the analysis of various pieces of financial information in the financial statements of a business
69
Define Budget
an estimation of revenue and expenses over a specific period of time
70
Define variance
the difference between actual and budgeted sales
71
Define Favourable variance
when costs are lower than expected
72
Define adverse variance
When costs are higher than expected
73
Define subordinate
an employee who is not management level and responds to a group of managers
74
What is a theory x management style?
When employees are strictly controlled and not given any freedom to make decisions
75
What is buffer stock?
A minimum level of stock
76
What is lead time?
The amount of time between ordering supplies and then arriving

Business (7 decks)

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