Business Studies BST315116 Exam Prep

Vocabulary-style flashcards covering the key terms, business classifications, operational concepts, and financial ratios found in the Business Studies BST315116 Mid-Year Exam transcript.

PESTLE analysis

An analysis involving the examination of external influences on a business.

Incorporated business

A business structure that is legally distinguished as a separate entity from its owners.

Unincorporated business

A business structure where there is no legal distinction between the owner and the business entity.

Australian Bureau of Statistics (ABS)

The organization that provides the classifications for micro, small, medium, and large businesses based on the number of employees.

Primary sector

An industry sector category involving the extraction or harvesting of natural resources.

Secondary sector

An industry sector category involving the manufacturing and processing of raw materials into finished products.

Tertiary sector

An industry sector category involving the provision of services rather than goods.

Competitive advantage

The favorable position a business gains by using strategies to outperform its competitors.

Outsourcing

The operational decision to contract out certain business functions or processes to an external provider.

Transformation process

The stage in operations where inputs are converted into a specific good or service.

Quality control

The process of maintaining standards in products or services by testing output against specifications.

Quality management

The use of management strategies to improve the production process and ensure high-quality outcomes.

Corporate social responsibility (CSR)

The commitment of a business to act ethically and contribute to the community or environment, such as through sustainable practices or donations.

Product differentiation

A strategy used to distinguish a product or service from others in the market to maintain a competitive advantage.

Current ratio

A liquidity ratio used to assess a business's ability to pay short-term debts: $\frac{\text{Total Current Assets}}{\text{Total Current Liabilities}}$

Gearing (debt to equity) ratio

A solvency ratio used to measure the proportion of debt used to fund a business: $\frac{\text{Total Liabilities}}{\text{Total Owner's Equity}}$

Liquidity

The measure of how easily a business can meet its short-term financial obligations as they fall due.

Solvency

The ability of a business to meet its long-term financial commitments and keep operating in the future.

Debtors Collection Period

An efficiency ratio measuring the average number of days it takes for a business to collect payments from customers who have purchased on credit.

Variable / Direct Costs

Costs that change directly with the level of production, such as raw materials (sauce, chicken, oil) and wages: $\text{Variable Cost per unit}$

Annual / Fixed costs

Costs that remain constant regardless of how many goods or services are produced, such as marketting, administration, and kitchen utensils.

Contribution margin

The amount each unit sold contributes towards covering fixed costs: $\text{Selling Price} - \text{Variable Cost per unit}$

Break-even analysis

A management tool used to determine the sales volume at which total revenue equals total costs: $\frac{\text{Fixed Costs}}{\text{Contribution Margin}}$