Unit 2

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  • Created by: rhiannon
  • Created on: 10-04-14 23:03
Retained Profit
The part of its profit used by a company to put back into the business, rather than be given to shareholders.
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Merger
Two businesses joining together to save on their costs or reduce competition.
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Diversify
Produce a range of goods or services, which spreads the risk of the business failing.
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Demerger
Breaking up a business into two or more separate parts, each run independently.
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Organic Growth
Growing by increasing turnover and sales.
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Input
The resources or factors of production that a business uses to produce its product.
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Redundant
When resources, such as members of the labour force, are no longer needed.
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Takeover
Taking control of another business by buying more than half of its shares.
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Acquisition
A business that is allowed to sell shares to anyone who wants to buy them.
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Brand Name
A well-known company or product that consumers trust.
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Royalty
The fee paid to a business for using its brand name.
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Overstreched
When a business tries to grow too quickly, which can result in profits falling.
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Product Life Cycle
The product life cycle is the succession of strategies used by business management as a product goes through its life cycle.
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Profit and Loss Account
A profit and loss account shows the businesses financial performance over a given time period e.g. one year.
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Balance Sheet
An account that gives a statement of a firms wealth on a particular date and shows its assets, liabilities and capital.
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Costs of Sales
The costs of goods made or bought by a business.
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Corporation Tax
The tax paid by the business on their profits.
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Fixed Costs/Overheads
Costs that do not change as output changes.
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Current Assets
These are the assets which can be easily turned into cash such as stock and debtors.
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Current Liabilities
These are debts which the firm has to repay within one year.
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Capital Employed
This is the amount of capital or money put into the business.
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Liquidity
A businesses ability to meet short term cash payments on time.
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Current Ratio
A measure of the ability of the business to meet short term debts.
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Acid Test Ratio
A measure of the ability of the business to meet short term debts but it considers that a firm may struggle to sell stock or have to sell it for less.
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Outsourcing
Where business functions are provided by external specialist organizations rather than provided in-house.
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Homeworking
Where employees can do their job from home, increasingly linked to their employer via the internet.
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Peripheral Workers
Part time, temporary and self-employed workers brought into the business as and when needed.
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Chain of Command
The order in which authority and power is used and delegated to each member of staff in an organization.
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Span of Control
The number of people who report to a manager in a hierarchy.
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Delayering
The action or process of reducing the number of levels in the hierarchy of employees in an organization.
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Economies of Scale
The reason why production costs of each item falls as a firm expands.
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Diseconomies of Scale
The reason why production costs of each item rise as a firm expands.
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Lean Production
A production approach that aim to use fewer resources by using them more efficiently.
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Just In Time Manufacturing
Ordering supplies so they are delivered just when needed and making goods only when they have been ordered.
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Specialization
Work is divided into separate jobs that allows workers to become skilled at one of them.
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Flow Production
Large scale, continuous production on a production line.
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Expenses
Indirect costs incurred with operating the business, not direct production costs.
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Off the Job Training
Training provided away from the workplace often provided by a specialist trainer.
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On the Job Training
Training that takes place within the business, so that the employees learns about their work whilst completing tasks in a real situation.
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Other cards in this set

Card 2

Front

Two businesses joining together to save on their costs or reduce competition.

Back

Merger

Card 3

Front

Produce a range of goods or services, which spreads the risk of the business failing.

Back

Preview of the back of card 3

Card 4

Front

Breaking up a business into two or more separate parts, each run independently.

Back

Preview of the back of card 4

Card 5

Front

Growing by increasing turnover and sales.

Back

Preview of the back of card 5
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