Business Key Words: Unit 1 - What is a business

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  • Created by: gabs125
  • Created on: 19-04-16 12:22
S.M.A.R.T Objectives
Specific: what is being measured. Measurable: quantifiable. Agreed: commitment from workforce. Realistic: achievable. Time specific: how long workforce has to achieve the target
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Profit
The extent to which revenues from sales exceed the costs from producing the product. (Profit = total revenue - total costs)
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Revenue
Earning or income generated as a result of trading or selling. (Revenue = quantity sold x average selling price)
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Cash Flow
Amount of money moving into and out of a business over a period of time
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Stakeholders
Individuals or groups who have an interest in a business (e.g. employees, customers, suppliers)
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Fixed Costs
Costs that do not alter when the business changes its level of output. (e.g. rent and rates)
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Variable Costs
Alter directly with the business' level of output (e.g.fuel costs)
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Total Costs
Fixed + Variable costs
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Average Costs
Total production costs divided by the level of production or output to give the cost of producing a single unit output
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Sole Trader
A business that is owned and managed by one person, but may employ other people.
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Private Limited Companies (Ltd)
Limited Liability, shares can only be owned and sold by family or friends (Sold privately)
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Public Limited Companies (Plc)
Larger than private companies, owned by shareholders, no restriction on shares - cannot sell more than 50% of shares or there is loss of control, limited liability.
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Unlimited Liability
Individual personally responsible for all actions of the business, therefore personal assets could be lost if the business has financial problems.
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Limited Liability
In the event of financial difficulties, personal belongings of shareholders and owners are safe.
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Company
Business/organisation that has its own legal identity and has limited liability.
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Incorporation
Process of establishing a business as a separate legal identity, benefiting from limited liability.
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Shareholder
Investor who owns shares of the business
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Dividends
Profit shares of a company that are distributed to shareholders.
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Market Capitalisation
Total value of the issued shares of a public limited company
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Privatisation
State sells businesses that is has previously owned and managed to private individuals and businesses.
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External factors that shape a business
Economic | Demographic | Environmental and Social | Market
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Interest rates
Price of borrowed money
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Fair Trade
Social movement that exists to promote improved trading terms and living conditions for product producers in less developed countries
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Sustainable production
When the supply of a product does not impose costs on future generations e.g. renewable resources
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Other cards in this set

Card 2

Front

The extent to which revenues from sales exceed the costs from producing the product. (Profit = total revenue - total costs)

Back

Profit

Card 3

Front

Earning or income generated as a result of trading or selling. (Revenue = quantity sold x average selling price)

Back

Preview of the back of card 3

Card 4

Front

Amount of money moving into and out of a business over a period of time

Back

Preview of the back of card 4

Card 5

Front

Individuals or groups who have an interest in a business (e.g. employees, customers, suppliers)

Back

Preview of the back of card 5
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