Edexcel GCSE Business (9-1) Key Terms: 1.3 Putting a business idea into practice

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  • Variable cost
    • A cost which rises as output rises. E.g. Raw materials or packaging.
    • Topic 1.3
      • Revenue
        • The money made from selling a product.
      • Profit
        • The amount left from revenue after costs have been paid.
      • Aims and objectives
        • The goals of a business. These may be financial or non-financial.
      • Break-even
        • The number of products a business must sell so that its total revenue is the same as its total costs. At this point the business will make no profit or loss.
      • Cash flow
        • The flow of money into and out of a business over a period of time
      • Non-financial aim
        • Aims and objectives that relate to areas other than finance. E.g. Social objectives, personal satisfaction, challenge and control.
      • Net cash flow
        • The difference between cash inflows and cash outflows over a period of time.
      • Margin of safety
        • The amount of products a firm sells over and above the breakeven point.
      • Fixed cost
        • Costs which do not change with output. E.g. Rent or salaries.
      • Financial aim
        • Aims and objectives that relate to the money. E.g. Survival, profit, sales, market share.
      • Semi variable costs
        • Some costs are fixed in the short term but changes when a certain level of output has been reached
      • Insolvency
        • When a business can no longer afford to pay its debts.

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