Definitions 3 0.0 / 5 ? Business StudiesMore definitionsASAQA Created by: LeighLeigh_Created on: 08-12-14 14:24 Fixed Costs Costs that do not vary with the amount of business activity 1 of 28 Variable Costs Costs that do vary with the amount of business activity 2 of 28 Revenue Income or earnings over a period of time 3 of 28 Opportunity Cost 'real cost' of taking a particular action or the next best alternative 4 of 28 Profit The reward for taking a risk 5 of 28 Enterprise Process by which new businesses are formed and new products and services are created and brought to the market 6 of 28 Enterprise skills Skils that allow an individual or organisation to respond effectively to changing market situations (e.g problem solving) 7 of 28 Entrepreneur A person with an idea that they develop; by setting up a business 8 of 28 Breakeven The point at which the business makes just enough revenue to cover their costs 9 of 28 Contribution Is the amount of money a single item makes over and above its own variable cost of production 10 of 28 Partnership 2 or more people share the costs, risks and responsibilities of being in business together 11 of 28 Sole Trader Individual who owns and runs their own business (has unlimited liability) 12 of 28 Unlimited Liability Personally responsible for all debts run up by businesses 13 of 28 Private Limited Company (PLC) Cant go on stock exchange - can't offer shares to public 14 of 28 Limited Liability Partnership (LLP) Partners have limited liability up to the amount of money they have invested in the business 15 of 28 Budget An agreed plan establishing in numerical or financial terms, the policy to be persued & the anticipated outcomes of that policy 16 of 28 Income Budget Agreed, planned income of a business over a period of time 17 of 28 Expenditure Budget Planned expenditure of a business over time 18 of 28 Bank Loans Ususally for a specific time period 19 of 28 Bank Overdraft An extension of credit from the bank 20 of 28 Business Angel Investors Wealthy people that want to invest (for a share) 21 of 28 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 22 of 28 Cash Flow Forecasting Process of estimating the expected cash inflows & outflows over a period of time 23 of 28 Cash Flow Statement Description of how cash flows into & out of the business during a particular time period 24 of 28 Cash Flow Cycle Regular pattern of inflows & outflows of cash within a business 25 of 28 Cash Flow Amounts of money flowing into & out of a business over a period of time 26 of 28 Cash Inflows Receipts of cash 27 of 28 Cash Outflows Payments of cash 28 of 28
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