Business studies key terms

18.35 - 18.51 16min 18.51-19.14 23min 19.14-19.36 22min 19.36-19.51 15min 8.13

absenteeism

employee’s non-attendance at work without good reason

acid test ratio

ratio between liquid assets and current liabilities

adding value

selling a product for more than it cost to produce it

advertising

paid-for communication with consulers which uses printed and visual media. the aim is to infor, and persuade consumers to buy a product

annual general meeting

a meeting for shareholders that limited companies must hold once every year

appreciation

a currency is said to appreciate if the value of the currency increases with respect to another currency

appropriation account

records the distribution of profit after tax; usually dividends and retained profit

asssets

resources that are owned by a business

autocratic leadership

a nleadership style in which the leader makes all the decisions

average costs

the cost of producing a single unit of output

balance of payments

the difference between the value of export and import of goods and services of a country over a year

bank loan

provision of finance by bank which the business will repay with interest over an agreed period of time

barriers of trade

usually taxes, quotas or bans that one country places on the goods of other countries to prevent or increase the cost of them entering that country

batch production

the production of goods in batches. each batch passes through one stage of production before moving on to the next stage

below the line production

promotion that is not paid for communication but usees incentives to encourage consumers to buy

bonus

an additional reward paid to employees for achieving goals set by managers

brand

a name, image or symbol that distinguishes a product from competitors’ products

brand image

the genral impression of a product held by consumers

breask-even

the level of output where revenue equals total costs; the business is making neither profit nor loss

business activity

the process of producing goods and services to satisfy consumer demand

business environment

the combination of internal and external factors that influence the operations of a business

business plan

a detailed written document outlining the purpose and aims of a business which is often used to persuade lenders or investors to finance a business proposal

business start up

a newly formed business. they usually start small, but some might grow to become much bigger

capital expenditure

spending by a business non-current assests such as machnery or buildings

capital goods

physical goods used by other businesses to help produce other goods and services such as machinery and delivery vehicles

capital intensive

a production using a hjigh quantity of capital equipment compared with labour input

capital productivity

a measure of the efficiency of the captial by calculating the output per capital employed

cash-flow forecast

an estimate of the future cash inflows and outflows of a business

centralised organisation

one where all the important decision making is held at head office or the center

chain of command

the route through which authority ois passed down through an organisation

chain of production

the production and supply of goods to the final consumer involving activities from primary, secondary, and tertiary sector businesses

channels of distributions

how a product gets from the producer to the final consumer

Chef executive officer CEO

the most senior manager responsible for the overall performance and success of a company

collateral

non current assets offered as security against borrowing

commision

payment to the sales staff based on the value of the items they sell

communication media

the mehtods used to communicate a message

competitive pricing

setting a price similar to that of competitors’ products which are already established in the market

consumer

the final user of a product

consumer goods

products which are sold to the final consumer. they can be seen and touched

consumer markets

markets for goods and services bought by the final consumer

consumer services

non-tangible products such as insurance, sevices, transport

corporate social responsability CSR

business taking responsability for the impact their acitivties might have on society and the environment

cost-benefit analysis

analysis of the costs and benefits of a project, the focus being on the social costs and benefits

costs of sale

the costs of producing the goods used to make the products sold

cost-plus pricing

setting price by adding a fixed amount to the cost making or buying the product

credits sales

goods sold to customers who will pay for thos at an agreed date in the future

crowd-funding

financing a business idea by obtaining small amounts of capital from a large number of people, most often using the internet and social media networks

current assets

resources that the business owns and expects to convert into cash before the date of the next statemnt of financial position

current liabilities

debts of the business which it expects to pay before the date of the next statement of financial position

current ratio

the ration between current assets and current liabilities

customer

an individual or business that buys goods & services from a business

customer base

the group of custormers a business sells its products to

customer relationship marketing

using marketing activites to establish, maintain and improve relationships with customers to build customer loyalty

debenture

a bond issued by a company to raise long-term financeusually at a fixed rate of interest

debt factoring

selling trade recievables to improve business liquidity

decentralised organisation

one where the decision making powers are passed down the organisation to lower levels

delayering

reducing the size of the hierarchy of a business by removing one or more levels - most often middle management

delegation

passing responsability to perform taks to employees lower down in the organisation

demand

the quantity of goods and sercixes consumers are willing and able to buy

democratic leadership

a leadership style where employees take part in decision making

demographic segmentation

dividing consumers in the marker by factors such as age, gender, income, etchnic background and social class

depreciation

a cuurency is said to depreciate if the value of the currency goes down with respect to another

direct mail

also known as '“mailshots”; printed materials which are sent driectly to the addresses of customers

direct selling

the product is sold by the producer directly to the final consumer without the need for any middlemen

direct tax

the tax charged on personal income or tax on the profit made by a business

directors

appointed or elected members of the BOard of directors of a company who have the repsonsability for determinging and implementing the company’s policy. some directors might also have a management role, for example a marketing director

diseconomies of scale

factors that cause average coqts to rise aas the scale of operations increases

dismissal

termination of employment by the employer because employee has broken company rules or is not performing work to the required standards

disposable income

the amount of income left for indviduals after atxes have been paid

divident

a payment, out of profits, to shareholders as reward for their investment

division of labour

producttion is divided into seperate tasks and each employee does just one of those tasks

domestic market

the market for goods and services in the business’s own country

E-commerce

the use of the internet and other technologies sued by businesses to market and sell goods and services to customers

Economic problem

unlimited wants cannot be met because thre are limited factors of production. this creates scarcity

economies of scale

the reduction in average coests as a result of increasing the scale of operations

effectivve communication

information passed between two or more people or groups, with feedback to confirm that the message has been recieved and understood

entrpreneur

an individual who takes the financial risk of starting and managing a new business

equity finance

permanent finance provided by the owners of a limited compnay

exchange rate

the rate at which one country’s currency can be exchanged for that of another

expenses

day to day operating expanses of a business

extension strategies

marketing acitivties to extend the maturity stage of a product

external recruitment

filling a vacant post with somebody not already employed in the business

externality

the effect of business activites on unrelated parties

factors of production

the resources needed to produce goods and services - land, labour, capital and enterprise

feedback

the receiver’s response to a message

financial rewards

cash and non-cash rewardsd paid to employeed which are often used to motivate employeed to increase their efforts

fixed costs

costs that do not cnage with output

need

a good or service essential for living

want

a good or service that pepople would like to have but is not necessary for living. People have unlimited wants

economic problem

there are unlimited wants but limited resources to produce the goods and servides to satisfy wants. this creates scarcity

factors of production

resources needed to produce goods and services. they are limited in supply

1) Land

2) Labour

3) Capital

4) Enterprise

scarcity

the lack of sufficient products to fulfill the total wants of th epopulaiton

Opportunity cost

the next best alternative given up by choosing another item

Specialization

when people and businesses concentrate on what they’re best at

division of labour

when the production process is split up into different tasks and each worker performs one of these tasks. It is a form of specialization

added value

the difference between the selling price of a product and th ecost of bought in materials and components

primary sector

extracts and uses natural resources to produce raw materials used by other businesses.

secondary sector

manufactures goods using raw materials provided by primary sector

tertiary sector

provides services to costumers and other sectors of industry

de-industrilization

there is a decline in the importance of the secondary sector of industry in a country