BUSS3 definitions

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

Card 2

Front

An increase in the overall scale of a business

Back

Growth

Card 3

Front

Selling new products in new markets

Back

Preview of the back of card 3

Card 4

Front

Goals pursued by a particular function within a business to help achieve a corporate objective

Back

Preview of the back of card 4

Card 5

Front

A medium to long-term strategy used by a function within a business, to help them achieve their functional objectives

Back

Preview of the back of card 5
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