AS Business Studies

  • Created by: imcness
  • Created on: 11-04-18 11:16
Added Value
The value of the finished output over and above the cost of achieving it
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Added Value (Equation)
Added Value = Selling price - cost of inputs
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Bank Manager
A senior professional within a bank can offer help and advice to entrepreneurs
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Break Even Output
The level of output at which the business is making neither a profit nor a loss, the point which TR=TC
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Break Even Output (Equation)
Fixed Costs / Contribution per Unit
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Contribution Per Unit (Equation)
Selling Price - Variable Cost per Unit
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Closing Balance
A section of the cash flow forecast identifying the amount of money left at the end of a period
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Closing Balance (Equation)
Opening Balance + Net Cash Flow
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Net Cash Flow (Equation)
Cash Inflows - Cash Outflows
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Competitive Advantage
A feature of a business that allows it to perform more successfully than others in the market
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Consultant
A professional who is brought in from outside the business to provide specialist help and advice
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Contribution per Unit
The amount of money each unit sold contributes towards the fixed costs once break even has been achieved then contributes towards profit
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Copyright
Legal protection for anyone that has produced work in a range of areas
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Credit Purchase
A purchase made by a business where they pay the supplier at a later date
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Credit Sales
A sale made by a business where the customers' payment is received after the date of the sale
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Enterprise
The willingness to undertake new ventures and show initiative with a view of gaining rewards
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Government Agencies
Government funded organisations whose remit is to support entrepreneurs and enterprising behaviour
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Government Incentives
Actions taken by the government to influence the behaviour of individuals or organisations
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Incorporated
A business with a separate legal identity from its owners; incorporated businesses include private and public limited companies
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Infrastructure
The availability of external services which can be utilised by a businesses including transport links, utilities
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Innovation
A new idea or invention which is launched onto the market normally with a view to financial gain
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Limited Liability
An investor's liability / financial commitment are limited to the total amount invested or promised in share capital
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Liquidity
The ability of a business to meet day to day expenses and short term debts
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Loan Capital
Money acquired which must be repaid with interest
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Market Segmentation
The splitting of customers into categories in order to identify different characteristics of consumers
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National Markets
When businesses sell to a wide geographical area
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Net Monthly Cash Flow
The balance of the month's total cash inflows in relation to the month's total cash outflows
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Net Monthly Cash Flow (Equation)
Cash Inflows - Cash Outflows
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Opening Balance
The amount of money left at the end of the previous period to start the next period
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Opening Balance (Equation)
Opening Balance + Net Cash Flow = Closing Balance
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Ordinary Share Capital
Investment given to a business in return for a share of the profit and a voting right
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Patent
Protects an idea by granting the holder the sole right to use unique features of a new product or process for a specific period of time
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Physical Markets
When the is an actual location where the buyers and sellers meet
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Private Limited Company
An incorporated business owned by a small number of shareholders and whose shares are not publicly traded
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Product Niche
The identification of a product that will meet the currently unsatisfied needs of a customer
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Public Limited Company
An incorporated company that is able to sell shares on a stock exchange
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Qualitative Factors
Factors influencing location based upon the personal desires and needs of the entrepreneur
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Quantitative Factors
Factors influencing location based upon measurable and financial incentives
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Quota Sample
A population is first segmented into subgroups before a judgement is made in selecting respondents that are representative of the subgroup
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Random Sample
A proportion of the population is selected for a study within which each individual has an equal chance of being selected
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Secondary Industry
Businesses responsible for turning raw materials into partially finished or finished goods
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Stratified Sample
A population is first segmented into subgroups before respondents are randomly selected from within that subgroup
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Tertiary Industry
Businesses responsible for providing a service
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Total Contribution
The total amount of money contributed first towards fixed costs and then profit from all goods sold
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Total Contribution (Equation)
Sales Revenue - Total Variable Costs
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Total Contribution (Equation) (2)
Contribution per Unit X Quantity Sold
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Trademark
Protects a feature that distinguishes a business from others, it might include words, pictures, logos or a combination of these
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Transformation
The process of changing inputs into outputs to meet customer needs
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Unincorporated
A business and its owners have the same legal identity; the owner is therefore liable for all the actions of the business including debts
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Unlimited Liability
The owners of the business are responsible for the total amount of debt of a business
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Venture Capital
Investment from an established business into another business in return for a percentage equity in the business
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Absenteeism
The number of staff who miss work as a proportion of the total number of staff
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Absenteeism (Equation)
Number of Staff Absent per Time Period / Number of Staff Days Worked per Time Period X 100
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Automation
The use of machines to control a process within operations management
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Barriers to Entry
Obstacles that make it difficult for a new firm to enter into a market including brand loyalty and high start-up costs
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Boston Product Matrix
A model used to analyse a firm's product portfolio by considering market share relation to market growth for each product
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Capacity Utilisation
A measure of the percentage of potential output being achieved
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Capacity Utilisation (Equation)
Actual Output / Maximum Output X 100
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Cash Cow
A classification of a product within the Boston Matrix characterised by low market growth and high market share
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Cost Reduction
The range of methods that a firm will use in order to lower costs and therefore improve profitability
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Decline
The point in a product life cycle, after maturity, where sales are starting to fall and the firm may decide to discontinue the product
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Delegation
The passing of authority down the hierarchy; authority occurs when a subordinate is given the right to do something by a superior in the hierarchy
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Dog
A classification of product within the Boston Matrix characterised by low market growth and low market share
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Extension Strategy
A strategy that is used to extend the lifetime of a product
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Financial Motivators
The variety of methods that have a money value and are used to reward the workforce and influence their behaviour at work
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Growth
The stage of the product life cycle that occurs when sales volume and revenue is increasing over time and costs may be falling due to economies of scale
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Herzberg's Dual Factor Theory
A motivation theory, that states some factors will create job satisfaction whilst others reduce dissatisfaction
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Income Elasticity of Demand
The responsiveness of demand to a change in income
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Income Elasticity of Demand (Equation)
% Change in Quantity Demanded / % Change in Income
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Integrated Marketing Mix
When the elements of the marketing mix are complementary to each other and create a coherent brand image
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Launch
The stage of the product life cycle where the product is introduced to the market
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Loss Leader
A pricing tactic that involves selling products at or below the cost of making the product
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Maslow's Hierarchy of Needs
A motivation theory, that states human needs are arranged in order, and as one need is fulfilling greater motivation will be achieved by moving on to the next level
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Maturity
The stage of the product life cycle where sales of the product are fully established and sales tend to remain consistent
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Mayo's Human Relations School of Thought
A motivation theory that states the importance of meeting workers' social needs in order to motivate them
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Monopoly
A market condition where there is only one firm in the market
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Net Profit Margin
A measure of a firm's profitability by looking at the relationship between net profit and sale revenue
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Net Profit Margin (Equation)
Net profit / Sales Revenue X 100
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Niche Market
When a firm targets a small subsection or previously unexploited gap in a larger market
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Oligopoly
A market condition where there are only a free firms competing in the market
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Price Elastic
A change in price leads to a proportionally greater change in demand; the coefficient PED is greater than 1
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Price Elasticity of Demand
The responsiveness of demand to a change in price
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Price Elasticity of Demand (Equation)
% Change in Quantity Demanded / % Change in Price
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Price Inelastic
The demand for a product is not very responsive to a change price; the coefficient PED is less than 1
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Price Leaders
When firms that dominate a market set the price other firms in the market follow suit
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Price Penetration
Setting a low and initial price for a new product in order to get a foothold in the market and gain market share
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Price Skimming
A pricing strategy that involves setting a high initial price when a product is launched
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Price Takers
Smaller firms in a market who set their prices based on the market price
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Problem Child
A classification of the Boston Matrix characterised by high market growth and low market share
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Rationalisation
Actions taken to cut costs by reducing the scale of the organisation and therefore reducing capacity
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Return on Capital Employed
A profitability ration that measures profit in relation to the capital invested in the business
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Star
A classification of the product with the Boston Matrix characterised by high market growth and high market share
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Taylor's Scientific Management
A motivation theory that states all tasks should be studied scientifically and that each employee should be trained and instructed in exactly how to do a job in the most efficient manner
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Return on Capital Employed (Equation)
Net Profit / Capital Invested X 100
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Market Capitalisation
The market value of a business's total issued shares used as a measure of business performance
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Market Capitalisation (Equation)
# of Ordinary Shares X Market Share Price
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Tannenbaum Schmidt
A model of management that examines the relationship between the authority of a manager and the level of a team's freedom in relation to decision making
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Blake Mouton
A model of management that assesses the extent to which a manager has concern for people and concern for production
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Intuition
An approach to decision making based on personal opinion and without conscious reasoning
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Expected Value
The monetary value of an outcome
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Expected Value (Equation)
Expected Monetary Value / Probability
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Net Gain
The monetary expected to be achieved if a particular decision is made
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Net Gain (Equation)
Total Expected Value - Cost of Decision
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Stakeholder Mapping
The process of categorising stakeholders by their level of power over a business and their level of interest in it
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Market Mapping
A method of categorising brands in a market by comparing two different variables, such as perceived quality and frequency of purchase
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Confidence Intervals
The range of values between which the value of a parameter lies
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Extrapolation
The process of forecasting trends based on previously gathered data
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Income Elasticity of Demand
The responsiveness of demand to changes in income
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Income Elasticity of Demand (Equation)
% change in demand / % change in income
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Labour Intensive
A business where a larger proportion of total costs are accounted for by labour than the proportion spent on capital equipment
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Capital Investment
A business where a larger proportion of total costs are accounted for by the purchase and maintenance of capital equipment than labour
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Lead Time
The difference between the time we
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Buffer Stock
The quantity of stock that is used to safeguard against unforeseen difficulties in securing new supplies of raw materials
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Capital Structure
How the finances a business uses to find its operations are divided proportionally between equity finance and debt finance
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Equity Finance
Investment provided by a business's owner
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Hard HRM
An approach to managing human resources where managers direct the workers through rules and procedures in order to achieve the organisation's goals
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Soft HRM
An approach to managing human resources where managers coach the workers to make the decisions that will enable the organisation to achieve their objectives
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Retention
The proportion of an organisation's workforce who remain with the company the following year
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Retention (Equation)
Number of Staff Remaining / Average # of Staff X 100
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Other cards in this set

Card 2

Front

Added Value = Selling price - cost of inputs

Back

Added Value (Equation)

Card 3

Front

A senior professional within a bank can offer help and advice to entrepreneurs

Back

Preview of the back of card 3

Card 4

Front

The level of output at which the business is making neither a profit nor a loss, the point which TR=TC

Back

Preview of the back of card 4

Card 5

Front

Fixed Costs / Contribution per Unit

Back

Preview of the back of card 5
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