Learn: Year 9 Commerce: Business, Finance and Investing Quiz Review

Investing

Putting money into assets with the aim of earning a return or increasing its value over time.

Saving vs investing

Saving involves keeping money safe and accessible, while investing involves taking some risk to potentially earn higher returns.

Types of investments

Shares, property, bonds, savings accounts and term deposits.

Shares

A share represents partial ownership of a company. Shareholders may earn money through dividends or increases in share prices.

Dividends

Payments a company may make to shareholders from its profits.

Capital gain

When an asset is sold for more than its original purchase price.

Capital loss

When an asset is sold for less than its original purchase price.

Risk and return

Investments with the potential for higher returns often involve higher risks. Returns are not guaranteed.

Diversification

Spreading investments across different companies or assets to reduce the risk of losing money.

Compound interest

Interest earned on the original amount of money and previously earned interest.

Inflation

A general increase in prices over time, which reduces the purchasing power of money.

Supply and demand

The availability of shares and the demand for them can influence share prices.

ASX

The Australian Securities Exchange, Australia's main sharemarket.

Purpose of the ASX Sharemarket Game

To help students understand how the sharemarket works and practise making investment decisions using virtual money without risking real money.

Buying shares

Purchasing partial ownership of a company.

Selling shares

Selling shares that you already own.

Portfolio

The collection of investments owned by an investor.

Share price

The price at which a share is bought or sold.

Profit

The amount gained when an investment is sold for more than it cost.

Loss

The amount lost when an investment is sold for less than it cost.

Market fluctuations

Changes in share prices caused by factors such as company performance, economic conditions, news and supply and demand.

Making investment decisions

Researching companies, comparing potential returns and considering risks before buying shares.

Business

An organisation that produces or sells goods and services to meet customer needs and wants.

Goods

Physical products that can be touched, such as clothes, food and phones.

Services

Activities provided to customers, such as haircuts, education and transport.

Needs

Things essential for survival, such as food, water, shelter and clothing.

Wants

Things people would like to have but do not necessarily need to survive.

Consumers

People who purchase or use goods and services.

Producers

People or businesses that create goods or provide services.

Factors of production

The resources used to produce goods and services.

Primary industry

Businesses that extract or obtain natural resources, such as mining and farming.

Secondary industry

Businesses that manufacture or process raw materials into products, such as car manufacturing.

Tertiary industry

Businesses that provide services, such as restaurants, banks and schools.

Business objectives

Goals a business wants to achieve, such as making a profit, increasing sales, growing, surviving or providing quality products.

Stakeholders

Individuals or groups affected by a business, including owners, employees, customers, suppliers, governments and the community.

Competition

When businesses try to attract the same customers by offering products, prices or services.

Supply

The amount of a good or service that producers are willing and able to sell.

Demand

The amount of a good or service consumers are willing and able to buy.

Revenue

The money a business earns from selling goods or services.

Costs

The money a business spends to operate.

Profit formula

Profit = Total Revenue − Total Costs.

Entrepreneur

A person who starts or organises a business, identifies opportunities and takes on business risks.

Entrepreneurship

The process of developing, organising and running a business.

Business idea

An idea for a product or service that could be sold to customers.

Business opportunity

An idea that has the potential to succeed by meeting customer needs or wants.

Characteristics of successful entrepreneurs

Creativity, initiative, persistence, confidence, adaptability, leadership, problem-solving and willingness to take calculated risks.

Innovation

Developing a new product, service or way of doing something, or improving an existing one.

Calculated risk

A risk taken after considering its possible costs, benefits and consequences.

Market research

Collecting information about customers, competitors and market demand before starting or developing a business.

Target market

The particular group of customers a business wants to sell to.

Business plan

A document outlining a business's goals, target market, products, marketing strategies, finances and operations.

Start-up costs

The expenses required to establish a business, such as equipment, supplies and registration.

Advantages of entrepreneurship

Independence, being able to follow an idea, potential profits and creating employment.

Disadvantages of entrepreneurship

Financial risk, uncertain income, long working hours, stress and the possibility of business failure.

Reasons businesses succeed

Good planning, understanding customers, managing money effectively, offering quality products and adapting to changes.

Reasons businesses fail

Poor planning, insufficient funds, weak marketing, lack of customers, strong competition and poor financial management.

Human resources

The people who work for an organisation and the management of its employees.

Human resource management

Recruiting, selecting, training, supporting and managing employees.

Recruitment

The process of attracting people to apply for a job.

Selection

Choosing the most suitable applicant for a position.

Job description

A document outlining the duties, responsibilities and tasks of a job.

Person specification

The qualifications, skills, experience and personal qualities required for a job.

Interview

A meeting where an employer assesses whether an applicant is suitable for a job.

Training

Teaching employees the skills and knowledge needed to perform their jobs effectively.

Remuneration

The payment and other benefits employees receive for their work.

Wages

Payment usually calculated according to hours worked or tasks completed.

Salary

A fixed amount of pay, generally paid annually in regular instalments.

Motivation

The factors that encourage employees to work effectively and achieve goals.

Employee benefits

Additional benefits provided by an employer, such as superannuation contributions, paid leave or other workplace benefits.

Workplace health and safety (WHS)

Measures used to protect employees and others from workplace risks and injuries.

Fair Work

Australia's workplace relations system, which includes rules and protections concerning wages, working conditions and employee rights.

Importance of HR

Effective HR helps businesses recruit suitable workers, improve productivity, develop skills, maintain safe workplaces and retain employees.

Employer responsibilities

Providing a safe workplace, meeting relevant employment laws, paying employees correctly and treating workers fairly.

Employee responsibilities

Following workplace procedures, performing duties properly, behaving professionally and following safety requirements.

Finance

The management of money, including income, expenses, borrowing, saving and investing.

Capital

Money or other resources used to establish and operate a business.

Start-up capital

The money needed to start a business.

Sources of finance

Personal savings, bank loans, investors, business partners and retained profits.

Internal finance

Money obtained from within the business, such as retained profits or funds contributed by the owner.

External finance

Money obtained from outside the business, such as bank loans or investments from external investors.

Loan

Money borrowed that must generally be repaid, usually with interest.

Interest

The cost of borrowing money or the return earned from saving or lending money.

Budget

A financial plan estimating expected income and expenses over a period.

Cash flow

The movement of money into and out of a business.

Cash inflow

Money entering a business, such as sales revenue or money received from a loan.

Cash outflow

Money leaving a business, such as rent, wages, stock purchases or loan repayments.

Assets

Resources owned or controlled by a business that have economic value, such as equipment, cash and property.

Liabilities

Debts and financial obligations owed by a business, such as loans and unpaid bills.

Equity

The owner's residual interest in the business after liabilities are subtracted from assets.

Fixed costs

Costs that generally do not change with the level of production in the short term, such as rent.

Variable costs

Costs that change with the level of production or sales, such as raw materials.

Break-even point

The point at which total revenue equals total costs, so the business makes neither a profit nor a loss.

Financial management

Planning, monitoring and controlling money to help a business achieve its objectives.

Total Revenue formula

Total Revenue = Selling Price per Unit × Number of Units Sold

Total Costs formula

Total Costs = Fixed Costs + Variable Costs

Break-even Point in Units formula

Break-even Point in Units = Fixed Costs ÷ (Selling Price per Unit − Variable Cost per Unit)