business equations or stuff i need to remember

what are merit goods?

Merit goods are goods or services that are under-consumed if left to the free market because people underestimate their benefits, so the government often provides them.

merit goods are said to have positive externalities, what does this mean?

means that the consumption of these goods will have positive effects not only on the individual that consumes them, but also on society in general.

features of the public sector goods

• non-excludable & non-rivalry

what is revenue?

the money a business makes from sales (also referred to as turnover)

what is footfall?

the number of customers entering into a physical store

what is total revenue?

the total amount of money a business receives from its sales

total revenue equation?

quantity of units sold x selling price

what are fixed costs?

business expenses that remain constant and don't change with the level of goods or services produced, such as rent, salaries, insurance, and property taxes

what is incorporation?

the legal process of forming a company as a separate legal entity from its owners

what is market segmentation?

splitting up a broad market of potential customers into smaller more distinct markets

what is cash flow

Cash flow is the net movement of money into (inflows) and out of (outflows) a business

What is a budget?

financial plan of action that usually covers a certain period of time, such as six months or a year

what are budget variances?

the differences between planned (budgeted) financial figures and actual financial results,

what is net cash flow

the difference between the total cash inflow and the total cash outflow Net cash flow = Total receipts – Total payments

what is added value?

a business adds value to the raw materials that it uses when making a product.

what is overhead costs?

the ongoing, indirect expenses of running a business that aren't directly tied to producing a specific product or service

difference between added value and profit

added value is the difference between the selling cost of the product minus the cost of raw materials while profit is the difference between

what is job production

a business method where unique, custom products are made individually from start to finish to meet specific customer requirements

what is batch production?

a manufacturing method where goods are made in groups (batches) of identical items, with each batch moving through a series of production stages together before the next batch starts,

what is flow production?

Flow production involves the production of products on production lines. There is a continuous process – the product flows from one stage of production to the next.

how is the production process for flow production?

The production process is broken down into a number of small, simple tasks enabling machines or robots to be utilised.

what does sustainability mean?

can the business keep operating in the long term

what is labour productivity?

Labour productivity = Output (per period) / Number of employees (per period)

what is capital productivty

Capital productivity = Output / Capital employed

what are direct costs?

Direct costs are costs that arise specifically from the production of a product or the provision of a service.

what are overhead costs?

overheads are costs not directly related to production.

how to calculate break-even?

fixed costs/ selling price - variable costs