Business Studies Unit 2

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The proportion on absent workers within a given period. Formula number of absent workers (in a given period) / number of workers x 100 (percentage.)
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When a employee is responsible for the success of a project.
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Added Value
The difference in price from the price of the finished product and the costs making it.
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Adding Value
the process of increasing value of a product by changing them during production process e.g. primary to secondary.
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Paying for communication to buyer. Aimed at informing or persuading.
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Someone who provides support and advice. Some times free provided by the government.
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Some who arranges the transaction between a supplier and customer.
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Where you replace workers with machinery to deal with production tasks.
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Bad Debt
Someone who has brought goods or services on credit and is unable to pay.
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Bank Loan
Used mainly for finance for long term assets. Will have a interest rate and will have a repayment schedule.
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Bank Overdraft
This is a short term loan, you can set up a limit for a over draft. It has a high interest rate because interest is charged every day.
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Where a business is unable to pay its debts so insolvency so has to sell all assets to pay creditors.
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Bench Marking
Analysis and comparison of how other businesses more efficiently and effectively.
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Best Case
In cash flow forecast or other forecasting the best case is where you have made the better assumption.
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This is where the research can't represent the whole population e.g because questions were misleading.
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Boston Matrix
A diagram which analyses 4 categories; stars, cash cows, problem children and dogs.
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Brain Storming
Way of thinking ideas. Taken as normally a group activity for effectiveness.
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Brand Extension
The use of successful brand name to launch new or modified product in market.
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Brand Loyalty
A motivated decision to buy or product or service.
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Break Even
Where total sales equals total costs making no profit no lost. The output is known as break even output.
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The income and expenses of a company during a given time. Start Ups do a budget covering 1st year.
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Budget Holder
A person in charge of managing a budget.They are responsible for the budget and have to explain why better or worse than expected.
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Business Angel
A investor who is willing to invest in a high risk business want high equity and provides added value business advice.
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Business Objectives
These are SMART targets which the business want to achieve.
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Business Plan
Detailed description of a new or existing business. It includes the product or service, the market, marketing plan, organisational plan, operational plan, financial plan and conclusion.
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Calculated Risk
A decision taken after consideration after comparing potential rewards to risks.
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The total potential of production output over given time.
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The money invested in a business or project. Formula Share capital invested + profits retained in company.
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Capital Expenditure
Money spent on long term fixed assets which business will use over given time over a year.
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Cash Cow
Low growth businesses or products with high market share.
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Cash Flow
Difference between inflows and outflows is net cash flow. The estimates of inflows and outflows in future are cash flow forecast.
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Cash Flow Forecast
A projection for week, month, year of inflows and outflows important management for activity of business.
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Chain Of Command
Describes chain of authority in hierarchy who reports to whom.
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Closing Balance
The amount of money kept by a business at the end of a month covered by cash flow forecast.
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The security the bank requires for you to have a loan.e.g. taking a personal asset.
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Payment to a sales person for selling goods and services.
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The process of exchanging information or ideas between individuals and groups.
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Communication Channel
The method the communication occurs.
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A business organisation owned by shareholders, company has separate identity e.g. business and owner seprate.
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Competitive Advantage
(same as differentiator) One or more features of a product or service which gives advantage compared to other competitors. E.g. better quality, faster service.
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Confidence Level
Used in term with market research should be over 95% confident with sample size.
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Consultants offer advice on specialist areas, finance raising (grants) and protection (e.g patent.)
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Total Contribution
Formula = contribution per unit x number of units sold.
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Contribution Per Unit
Formula = Selling price per unit - variable costs per unit.
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Contribution Pricing
When a business sets prices to cover all variable costs per unit.
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When a employee is responsible for the success of a project.

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Added Value


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Adding Value


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