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Business Studies Edexcel Unit 3/4 > Keywords > Flashcards

Flashcards in Keywords Deck (77)
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What are takeovers?

One business succeeds in buying more than half the shares of another business. This may happen as an agreement or a long battle.


What are tactical decisions?

Shorter term steps taken to achieve the strategy.


What is a strategy?

A plan of action that is designed to fulfil an objective.


What is a strategic decision?

A decision made in order to meet objectives of the business; usually long term.


What is Return On Capital Employed (ROCE)?

What is the formula?

Measures the amount of profit made as a percentage of the money invested into the business. For every £1 invested, you get X% pence back.

Formula: Net profit/capital employed X 100


What is ratio analysis?

Using information from financial statements and turning it into numbers which are easy to understand and can be used to compare performance over time.


What is a product portfolio?

Range of products/services a business produces.


What is a profit margin?

The percentage of turnover that is actually profit.


What is a profit and loss account?

Shows a companies profit and loss over a given period.


What is product development?

Selling a new product to the same customers.


What is payback?

What is the formula?

The length of time it takes to get your money back from the original investment.

Amount invested/predicted annual cash flow.


What is portfolio analysis?

Appraisal of the product portfolio to determine its worth and contribution to the business.


What is organisational restructuring?

Changing roles, responsibilities and relationships within a managerial structure to meet the needs of the expanding business.


What is organic growth?

Occurs when the business grows from within by using its own resources to produce and sell more.


What are mergers?

When two businesses combine by mutual agreement, then operate under a unified management structure.


What is operating profit?

Gross profit minus the overheads.


What is a mission statement?

Inspirational and motivating version of an aim; short relevant and specific to convey value of the brand.


What is market penetration?

Selling more of the same products to the same customers.


What is market development?

Selling the same products to new customers.


What is liquidity?

How much cash a business has and the ease with which it can pay its debts.


What are liabilities?

Debts that must be repaid sometime in the future.


What is free float?

Amount of time an activity can be delayed without affecting not the EST of the next activity.


What is labour productivity?

What is the formula?

How much each employees produces on average over a given time period.

Formula: Output per time period/Number of employees.


What is labour turnover?

What is the formula?

The proportion of employees who leave over a certain time period.

Formula: Number of staff leaving/number of staff employed X 100


What is latest finish time (LFT)?

Latest time a task can be completed without holding up the next task.


What is investment appraisal?

Range of analytical techniques designed to aid decision making, helping a business decide on decision making.


What are intangible assets?

No physical existence, include brands/patents/managerial experience the business has.


What is inorganic growth?

Involves taking over or merging with another company in order to increase output and sales.


What is gross profit?

Turnover minus the cost of sales.


What is gearing?

What is the formula?

Measure the proportion of money in a business that is from a long term loan. For every £1 invested in the business, £X is borrowed.

Formula: Loan capital/capital employed X 100