AICE Business Ch. 2 & 3 Vocab

unlimited liability

business owners have full legal responsibility for the debts of the business

shares

a certificate proving partial ownership of a company, giving rights to dividends and voting

franchise

a legal right to use an existing business's name, logo, and system

joint venture

two or more businesses partnering on a specific project by forming a separate division

social enterprise

a business focused on social goals that reinvests most profits to help society instead of paying owners

revenue

the total amount of money a business earns over a specific time (selling price x quantity sold)

capital employed

the total value of all long-term finance invested in the business

market capitalization

the total value of a company’s issued shares

market share

sales of the business as a proportion of total market sales

organic growth

business expansion by opening new branches, shops, or factories

external growth

business expansion by integrating with another business by merger or takeover

takeover

when one company buys over 50% of another company's shares to gain control

horizontal integration

integration with a business in the same industry and at the same stage of production

vertical integration

integration with a business in the same industry

forward vertical integration

vertical integration with a customer business

backward vertical integration

vertical integration with a supplier business

conglomerate integration

integration with a business in a different industry

synergy

when combined businesses work together to perform better than they would separately

strategic alliance

an agreement where two independent businesses share resources to reach a shared goal

merger

a friendly agreement where two separate businesses join together to form a new, single company