BUSS3 definitions 0.0 / 5 ? Business StudiesAllA2/A-levelEdexcel Created by: J ChapmanCreated on: 09-03-14 23:57 Corporate Objectives The overall (long term) goals of an entire business 1 of 27 Growth An increase in the overall scale of a business 2 of 27 Diversification Selling new products in new markets 3 of 27 Functional Objectives Goals pursued by a particular function within a business to help achieve a corporate objective 4 of 27 Functional Strategy A medium to long-term strategy used by a function within a business, to help them achieve their functional objectives 5 of 27 Financial Objective A goal pursued by a businesses finance department 6 of 27 Cash Flow The amount of money flowing into and out of a business 7 of 27 Cost Minimisation Reducing all cost incurred by a business to the minimum possible level 8 of 27 ROCE (Return On Capital Employed) The net profit made by a business, expressed as a percentage of the value of the capital employed within the business 9 of 27 Shareholder Returns Share price plus all future dividends 10 of 27 Balace Sheet A accounting statement expressing the value of a firms assets and liabilities on the last day of an accounting period 11 of 27 Current Assets Assets that will be converted into cash by the end of the accounting year, and all cash owned by the business 12 of 27 Non-Current Assets Assets purchased for long term use, rather than resale, usually held for over a year 13 of 27 Working Capital (aka Liquid Assets) The funds available to a business to finance day to day opperations 14 of 27 Liquidity Refers to a businesses ability to pay off its short term debts 15 of 27 Depreciation The decrease in an assets value over time (listed as an expense on the income statement) 16 of 27 Income Statement An accounting statement that documents a firms sales revenue over a period of time, and the costs incurred generating that revenue 17 of 27 Gross Profit = Sales Revenue - Cost of Sales 18 of 27 Operating Profit = Gross Profit - (Expenses + Overheads) 19 of 27 Finance Income Interest earned by a business on deposits with banks 20 of 27 Finance Expenses Interest paid on loans owed by a business 21 of 27 Profit Quality Refers to the likelihood that an individual profit source will continue 22 of 27 Retained Profits Profits kept by the business and added to their balance sheet reserves 23 of 27 Distributed Profits Profits shared amongst external parties, such as owners, partners and shareholders 24 of 27 Intangible Assets Assets that are not physical in nature 25 of 27 Window Dressing Where a business makes (sometimes misleading) changes to their financial statements to make them more attractive to potential investors 26 of 27 Massaging Profit Figures Adjusting cost and revenue figures, often by moving sales forward from an earlier period 27 of 27
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