Business revision, key words. (Book 2)

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What is batch production?
When a business produces goods/services in groups. e.g loaves at a bakery.
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What is break even?
The point where total costs of producing a good and the amount of revenue earned equal.
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What is meant by cash?
This is money available for payment of day to day activities.
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What is cell production?
When a business splits itself into specialist areas, which each focus on part of the production of a good/service.
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What is contribution?
The difference between the variable costs of producing a good and the amount of revenue a company earns from selling it.
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What are current assets?
Assets that a business owns for up to a year, such as stock and debtors. These assets are easier and quicker to convert into cash than fixed assets.
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What are current liabilities?
Debts that a company has and that will be paid within the year.
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What is disposable income?
The amount of cash consumers have available to spend on things other than what is absolutely necessary.
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What is a dividend?
The share of profits that shareholders receive as a reward for their investment.
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What is meant by efficiency?
How much a business can achieve through a minimum number of units or average costs.
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What are fixed assets?
Assets that don't tend to change over time. These include things such as property or equipment owned by businesses.
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What are fixed costs?
Costs that do not change with the number of goods produced.
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What is a float?
When a company decides to trade its shares on the stock market.
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What is flow production?
A constant flow where a production line focuses on one good e.g a car plant.
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What is a grant?
Cash that is given to the business which they do not have to pay back.
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What is gross profit?
The difference between revenue and cost of sales.
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What is historical budgeting?
Basing and creating budgets based on previous budgets in recent years.
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What is job production?
When a business produces one good at a time. This is often applied when producing high quality products.
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What is kaizen?
Employees are split into groups and given direct responsibility for continuously analysing and improving, the practise of the business.
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What is liquidation?
The company are unable to pay off any expenses and debts so they're forced to close and sell off assets in order to attempt to pay some back.
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What is liquidity?
The ability that a business has through its assets to pay off its debts.
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What are long term liabilities?
Debts that a company has and that will be paid in more than a years time.
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What is macroeconomics?
Factors affecting businesses that are beyond their control.
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What are microeconomics?
Factors affecting businesses that are within their control.
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What is a market price?
The average price of a product/service depending on what consumers are prepared to pay.
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What is market size?
How big one market is, this could be based on the number of consumers, businesses or total sales/profits.
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What are net assets?
This is what is left once all liabilities have been subtracted from all assets.
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What is the calculation for net assets?
(Fixed assets + Net current assets) - Long term liabilities
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What are net current assets or working capital?
This is the finance available for the business to run its day to day processes.
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What is the equation for working capital?
Current assets - Current Liabilities
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What is net profit?
The profit after deducting cost of sales and all operating expenses and before tax.
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What is operating profit?
Difference between gross profit and other operating expenses.
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Utilisation of capacity?
How productive a business is compared to how productive it can be.
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What is over-utilisation of capacity and what are the consequences?
When workers are being over productive that it cannot handle which can lead to stress and overworked staff. Also minimises the potential for downtime and maintenance of equipment.
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What is productivity?
A company's hourly rate of output per each input. How much a company produces.
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What is profit?
Money that is left after all expenses and dividends have been paid.
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What is profitability?
How profitable a business is, comparing gross, operating profit or net profit with overall sales revenue.
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What is a sales forecast?
A prediction of the sales a company will make in a given time period, usually 12 months.
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What is sales revenue?
The amount of cash generated by selling products.
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What is sales volume?
The amount of products sold.
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What is a share?
When someone owns part of the company, the more shares someone owns the more influence they have in the business.
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What is TQM?
Total quality management. A constant, company wide culture of quality management.
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What are variable costs?
Costs that change according to the number of good produced.
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What is variance analysis?
A method to demonstrate how much of its budget a business has used.
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What is a zero based budget?
All departments in a company start with no budget. They must then prove to the company what they need in order to qualify for a budget.
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Other cards in this set

Card 2

Front

What is break even?

Back

The point where total costs of producing a good and the amount of revenue earned equal.

Card 3

Front

What is meant by cash?

Back

Preview of the front of card 3

Card 4

Front

What is cell production?

Back

Preview of the front of card 4

Card 5

Front

What is contribution?

Back

Preview of the front of card 5
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