Key Terms

Question 1

Limited Liability

Answer 1

The owner’s personal assets are protected.

Question 2

Ethics

Answer 2

Doing what is morally right

Question 3

Sustainability

Answer 3

Meeting needs without harming future generations

Question 4

Economy

Answer 4

The state of a country’s production and consumption

Question 5

Interest rates

Answer 5

Cost of borrowing Money.

Question 6

Exchange rates

Answer 6

Value of one currency compared to another

Question 7

Lean production

Answer 7

Minimising waste without losing quality

Question 8

Supply chain

Answer 8

The process from raw material to final product

Question 9

Just - In - Time (JIT)

Answer 9

Stock control method with no storage.

Question 10

Market segmentation

Answer 10

Dividing a market into groups

Question 11

Break - even

Answer 11

When total revenue equals total costs.

Question 12

Cash Flow

Answer 12

Money in and out of the business

Question 13

Fixed Costs

Answer 13

Costs that do not change with output

Question 14

Variable Costs

Answer 14

Costs that change with output

Question 15

Revenue formula

Answer 15

Price X Quantity

Question 16

Gross profit

Answer 16

Revenue - Cost of Sales

Question 17

Net Profit

Answer 17

Gross profit - Expenses

Question 18

Profit margin

Answer 18

Profit as a percentage of revenue