unit 1 key terms

Question 1

Business Objectives

Answer 1

The goals or targets that a business aims to achieve, such as profit maximization, growth, or survival.

Question 2

Profit

Answer 2

Total revenue minus total costs.

Question 3

Mission Statement

Answer 3

A qualitative statement of an organization’s aims that guides its actions and decisions.

Question 4

Vision Statement

Answer 4

A future-oriented declaration of a company’s purpose and aspirations.

Question 5

Revenue (Turnover)

Answer 5

The total income a business earns from its sales before any costs are deducted (Revenue = Price × Quantity).

Question 6

Costs

Answer 6

Expenditures incurred in the production of goods or services. Includes fixed costs and variable costs.

Question 7

Fixed Costs

Answer 7

Costs that do not change with output (e.g., rent, salaries).

Question 8

Variable Costs

Answer 8

Costs that vary with output (e.g., raw materials).

Question 9

Goods and Services

Answer 9

Tangible products (goods) and intangible offerings (services) provided by businesses.

Question 10

Entrepreneurship

Answer 10

The process of identifying business opportunities and taking risks to exploit them.

Question 11

Stakeholders

Answer 11

Individuals or groups affected by a business’s operations, such as employees, customers, suppliers, and shareholders.

Question 12

Sole Trader

Answer 12

A business owned and operated by one person.

Question 13

Partnership

Answer 13

A business owned by two or more people who share profits and responsibilities.

Question 14

Private Limited Company (Ltd)

Answer 14

A company owned by private shareholders with limited liability.

Question 15

Public Limited Company (PLC)

Answer 15

A company that sells shares to the public on the stock exchange.

Question 16

Limited Liability

Answer 16

Legal protection where the owner’s personal assets are not at risk if the business fails.

Question 17

Unlimited Liability

Answer 17

The business owner is personally responsible for all debts incurred by the business.

Question 18

Primary Sector

Answer 18

Businesses involved in the extraction of natural resources (e.g., farming, mining).

Question 19

Secondary Sector

Answer 19

Businesses that manufacture or construct products.

Question 20

Tertiary Sector

Answer 20

Businesses that provide services to consumers and other businesses (e.g., retail, finance).

Question 21

Quaternary Sector

Answer 21

Knowledge-based services such as research and development or IT.

Question 22

PESTLE Analysis

Answer 22

Political
Economic
Social
Technological
Legal
Environmental

Question 23

Political

Answer 23

Government policies, tax laws, regulations.

Question 24

Economic

Answer 24

Interest rates, inflation, unemployment, economic growth.

Question 25

Social

Answer 25

Cultural trends, demographics, lifestyle changes.

Question 26

Technological

Answer 26

Innovations, automation, digital transformation.

Question 27

Legal

Answer 27

Legislation impacting business operations (e.g., employment law).

Question 28

Environmental

Answer 28

Sustainability, climate change, and ecological concerns.

Question 29

Market Share

Answer 29

The percentage of total sales in a market controlled by one business.

Question 30

Customer Satisfaction

Answer 30

The degree to which customers are happy with a product or service.

Question 31

Corporate Social Responsibility (CSR)

Answer 31

A business's commitment to ethical practices, sustainability, and community welfare.

Question 32

Competitiveness

Answer 32

A business's ability to outperform rivals in the market.

Question 33

Risk

Answer 33

Measurable likelihood of negative outcomes, often associated with business decisions.

Question 34

Uncertainty

Answer 34

Situations where the outcome is unknown and cannot be measured.

Question 35

Opportunity Cost

Answer 35

The value of the next best alternative foregone when a decision is made.