Definitions 3

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Fixed Costs
Costs that do not vary with the amount of business activity
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Variable Costs
Costs that do vary with the amount of business activity
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Revenue
Income or earnings over a period of time
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Opportunity Cost
'real cost' of taking a particular action or the next best alternative
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Profit
The reward for taking a risk
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Enterprise
Process by which new businesses are formed and new products and services are created and brought to the market
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Enterprise skills
Skils that allow an individual or organisation to respond effectively to changing market situations (e.g problem solving)
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Entrepreneur
A person with an idea that they develop; by setting up a business
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Breakeven
The point at which the business makes just enough revenue to cover their costs
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Contribution
Is the amount of money a single item makes over and above its own variable cost of production
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Partnership
2 or more people share the costs, risks and responsibilities of being in business together
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Sole Trader
Individual who owns and runs their own business (has unlimited liability)
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Unlimited Liability
Personally responsible for all debts run up by businesses
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Private Limited Company (PLC)
Cant go on stock exchange - can't offer shares to public
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Limited Liability Partnership (LLP)
Partners have limited liability up to the amount of money they have invested in the business
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Budget
An agreed plan establishing in numerical or financial terms, the policy to be persued & the anticipated outcomes of that policy
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Income Budget
Agreed, planned income of a business over a period of time
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Expenditure Budget
Planned expenditure of a business over time
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Bank Loans
Ususally for a specific time period
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Bank Overdraft
An extension of credit from the bank
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Business Angel Investors
Wealthy people that want to invest (for a share)
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Venture Capitalists / Venture Capital
Firms that invest in smaller businesses with potential / Individual people, lots of money looking to invest into businesses for a share
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Cash Flow Forecasting
Process of estimating the expected cash inflows & outflows over a period of time
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Cash Flow Statement
Description of how cash flows into & out of the business during a particular time period
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Cash Flow Cycle
Regular pattern of inflows & outflows of cash within a business
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Cash Flow
Amounts of money flowing into & out of a business over a period of time
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Cash Inflows
Receipts of cash
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Cash Outflows
Payments of cash
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Other cards in this set

Card 2

Front

Costs that do vary with the amount of business activity

Back

Variable Costs

Card 3

Front

Income or earnings over a period of time

Back

Preview of the back of card 3

Card 4

Front

'real cost' of taking a particular action or the next best alternative

Back

Preview of the back of card 4

Card 5

Front

The reward for taking a risk

Back

Preview of the back of card 5
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