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B. Business Theme 2 > Key Words > Flashcards

Key Words Flashcards

(59 cards)

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1
Q

Acid Test Ratio

A

A liquidity ratio which shows whether a firm has enough funds to pay bills by comparing liquid assets to current liabilities

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2
Q

Adverse Variance

A

Where the difference between a budgeted and actual figure will lead to lower profits for the organisation

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3
Q

Asset

A

An item owned by a business

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4
Q

Bank loan

A

An agreed amount of borrowing from the bank which the business repays over an agreed amount of time paying back the amount with interest added

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5
Q

Batch Production

A

Where production activities are performed on all units before the next production activity is carried out

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6
Q

Break even

A

The point at which revenue is equal to total costs so neither a profit or loss is made

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7
Q

Budget

A

A financial target for the future

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8
Q

Buffer stock

A

The minimum amount of stock held by a firm to avoid stock outs

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9
Q

Business cycle

A

Shows how economic output changes over time as measured by the GDP

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10
Q

The 4 stages of the business cycle

A

Boom, recession, slump and recovery

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11
Q

Business failure

A

Where a firm can no longer exist due to either internal or external factors

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12
Q

Business plan

A

A document detailing the financial, marketing, HR and operational implications of a new business venture

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13
Q

Capacity

A

The maximum amount of production output with the given resources

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14
Q

Capacity utilisation

A

The amount of capacity available which is currently being used as a percentage

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15
Q

Capital intensive production

A

Production relies heavily on capital equipment rather than labour

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16
Q

Cash flow

A

The difference between the cash coming in and out of the business in a given time period

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17
Q

Competitive environment

A

The amount and nature of competition surrounding a business

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18
Q

Contribution per unit

A

Shows the amount a product contributes towards the fixed costs of the business

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19
Q

Crowdfunding

A

Where a firm raises finance by advertising funds through an internet website and raises cash by crowds of people putting in finance until the firm achieves its target funding

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20
Q

Economic environment

A

The factors in the economy which can impact onto a business such as inflation, unemployment etc

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21
Q

Economic uncertainty

A

Where economic forecasts for the future are difficult to predict

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22
Q

Efficiency

A

Saving time or money in production

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23
Q

Exchange rates

A

The price of one currency expressed in terms of another

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24
Q

Expenditure budget

Study These Flashcards
A

A financial target for the amount of costs in the future

25
External finance
Funds raised from outside the business such as from a bank loan or selling shares to investors
26
Favourable variance
Where the difference between the budgeted and actual figure leads to the firm making higher profits
27
Fixed costs
Costs that do not change in relation to output
28
Flow production
Where each operation is performed on each item one at a time and continuously before the next usually on a large scale production line
29
Government grant
Where the gov provides funding for the business normally in exchange for the firm helping society e.g. creating jobs
30
Government spending
Where the government funds various activities in the economy e.g. NHS or schools
31
Gross profit
The difference between revenue and variable costs
32
Historical budgeting
Setting a financial target for the future based on previous figures from last year
33
Income budget
A financial target for the future based on previous figures from last year
34
Inflation
Rises in the average price level over time as measured by the CPI
35
Internal finance
Finance raised from within the firm such as retained profits or selling an asset
36
Job Production
Producing one off items tailor made to the customers specification
37
Kaizen
Continuous improvement | Making many small changes to improve either quality or efficiency
38
Labour intensive production
Where production relies heavily on labour rather than capital equipment
39
Lead time
The time between placing an order and having the ordered delivered
40
Legislation
The different laws that can affect a businesses
41
Liquidity
The ability to turn an asset into cash
42
Margin of safety
The difference between the actual output and break even output Shows how many sales can afford to be lost before firm makes a loss rather than a profit
43
Operating profit
The profit from normal business operations after all costs are deducted from revenue
44
Ordinary share capital
Finance raised from selling shares
45
Overdraft
An agreement with the bank to borrow up an agreed amount beyond what is in the bank account
46
Owners capital
Finance put into the business by the owner
47
Peer-to-peer funding
Where a business borrows funds from another person via an internet site rather than borrowing from the bank.
48
Productivity
Measuring the output per worker to measure efficiency
49
Profit budget
A financial target for the future profit to be made
50
Profit for the year
The final profit made by a business after all costs are deducted from revenue including any bank interest deductions and all overheads
51
Quality
Delighting the customer in all aspects of the product
52
Quality assurance
Building in quality at each stage of production using techniques like Total Quality Management to get products right first time
53
Quality circles
A small group of workers who meet up and discuss how quality can be improved
54
Rationalisation
Cutting back on the scale of output e.g. by laying off staff
55
Retained profit
Amount of profit ploughed back into the business for growth and expansion
56
Sales forecasting
Making predictions of future sales perhaps by looking at market research or past trends
57
Sales rev
Finance received from customers from selling goods/services
58
Sales volume
The amount of units sold to customers
59
Solvency
The ability of a firm to pay its bills and survive

B. Business Theme 2 (3 decks)

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