YEAR 11 BUSINESS STUDIES VOCABULARY Flashcards
Advertising
A method of communicating information about the product; the business pays
for advertising time/space.
Aim
The intention to reach a goal.
Air pollution
The presence or introduction of harmful substances into the air causing disease,
allergies or damage to humans, animals, plants or the built environment.
Asset
Something the business owns; it has a value.
Average rate of return
The average profit for the year as a percentage of the original investment.
Average rate or return = average return per annum / initial × 100
Boston matrix
A tool for analysing the contribution made by each product in a business’
product portfolio. It plots each product’s position according to its market share
and the rate of growth of the market.
Brand image
The consumers’ perception of the brand; its character, qualities and
shortcomings. It is developed over time and operates as a consistent theme
through advertising campaigns.
Break-even chart
A diagrammatic representation of the costs and revenue for a product; it plots
total costs against total sales revenue, showing the break-even point where they
cross.
Break-even output
The point at which the business’ total sales equals the total costs. There is
neither profit nor loss.
Buffer stock
A stock of raw materials held in reserve to protect the production process from
unforeseen shortages.
Business plan
A detailed statement of how the business intends to operate, either at start-up
or during a given period of time. Business plans are based on forecasts and so
cover only a short time.
Cash
Money that the business has in cash or at the bank.
Cash flow forecast
A financial planning tool that estimates the money coming into and going out of
the business on a month-by-month basis; it allows the business to predict times
when additional finance may be needed to maintain liquidity.
Cash inflow
Money received by the business from its operations or investments.
Cash outflow
Money paid out by the business to fund its operations or investment activities.
Centralisation
Maintaining control by keeping authority at the senior levels of the organisation.
Chain of command
The line through the hierarchy that shows who is responsible for whom from top
to bottom of an organisation.
Channels of distribution
The route the ownership of the product transfers from the seller to the buyer; it
may be a single transaction or pass through others such as wholesalers,
distributors, agents and retailers.
Closing balance
The amount that remains in the account at the end of an accounting period.
Closing balance
The amount that remains in the account at the end of an accounting period.
Commission
An amount of money paid to an employee that is based on a percentage of the
sales he/she achieved; paid in addition to a basic salary.
Competition
The rivalry between businesses looking to sell their goods/services in the same
market.
Competitive pricing
Setting the price of a product so that it is in line with competitors’ prices.
Consumer law
Laws designed to ensure that businesses make products that are safe and of
good quality, and that they deal with customers honestly and fairly.
Consumer spending
The money spent by households on goods and services to satisfy their needs and
wants.
Contracts of employment
A legal document that sets out the terms and conditions of the job for the
employer and the employee.
Cost
The money spent by a business on goods and services.
Cost-plus pricing
Setting the price of a good or service at an amount higher than the cost of
producing it so that a profit is made.
