Business Vocabulary Review

A comprehensive set of vocabulary flashcards covering critical business terms and definitions.

absenteeism

A measure of the rate of workforce absence as a proportion of the employee total.

accountability

The obligation of the individual to account for and explain their actions and to disclose the results of their work honestly.

added value

The difference between the cost of purchasing bought-in inputs and the selling price of the finished goods.

administration

When administrators manage a business that is unable to pay its debts with the intention of selling it as a going concern.

adverse variance

A change from the budget that leads to lower than planned profit.

advertising

Paid-for communication to inform and persuade consumers, using media such as TV, newspapers and cinema.

annual report

A document that gives details of a company's activities over the year, including its financial accounts.

application form

A set of questions answered by a job applicant to give a potential employer information about the applicant.

arithmetic mean

The value calculated by totaling all the results and dividing by the number of results.

Articles of Association

This document covers the internal workings and control of the business, including the names of directors and procedures for meetings.

assessment centre

A place where a range of tests is used to judge job applicants on their potential ability to perform a particular role.

asset

An item of monetary value that is owned by a business.

authority

The power to give orders and make decisions.

autocratic management

A management style where one manager takes all decisions with very little, if any, input from others.

average cost

Total cost divided by the number of units produced.

backward vertical integration

Vertical integration with a supplier business.

bad debt

Unpaid customers' bills that are now very unlikely to ever be paid.

bankruptcy

The legal procedure for liquidating a business that cannot fully pay its debts.

batch production

The production of a limited number of identical products.

bonus

A payment made in addition to the contracted wage or salary.

Boston Matrix

A method of analyzing the product portfolio of a business in terms of market share and market growth.

brand

An identifying symbol, name, image or trademark that distinguishes a product from its competitors.

brand leader

The brand with the highest share of the market.

branding

The process of differentiating a product by developing a symbol, name, image or trademark for it.

break-even analysis

Uses cost and revenue data to determine the break-even point of production.

break-even point

The level of output at which total costs equal total revenue.

BRICS

The acronym for five rapidly developing economies: Brazil, Russia, India, China, and South Africa.

budget

A detailed financial plan for the future.

budget deficit

The value of government spending exceeds revenue from taxation.

budget holder

The individual responsible for the initial setting and achievement of a budget.

budget surplus

The value of taxation revenue exceeds the value of government spending.

budgeting

Planning future activities by establishing performance targets.

buffer inventory

Minimum inventory level that should be held to ensure continuous production is possible.

business aim

A long-term goal that a business hopes to achieve.

business investment

Expenditure by businesses on capital equipment, new technology, and research and development.

business mortgages

Long-term loans to companies purchasing a property for business premises.

business objective

A stated measurable target that a business plans to achieve.

business plan

A written document that describes a business, its objectives, strategies, market, and financial forecasts.

business process outsourcing (BPO)

A form of outsourcing that uses specialist contractors for certain business functions.

business strategy

A long-term plan of action for a business designed to achieve a particular objective.

capacity shortage

When demand for a business's products exceeds production capacity.

capacity utilization

The proportion of maximum output capacity currently being achieved.

capital employed

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

capital expenditure

The purchase of non-current assets expected to last more than one year.

capital goods

The physical goods used by industry to aid the production of other goods and services.

capital intensive

Involving a high quantity of capital equipment compared with labor input.

cash flow

The sum of cash payments to a business less the sum of cash payments from the business.

cash flow forecast

An estimate of the future cash inflows and outflows of a business.

cash inflow

Cash payments into a business.

cash outflow

Cash payments out of a business.

channel of distribution

The chain of intermediaries a product passes through from producer to final consumer.

closing cash balance

Cash held by the business at the end of the month.

coding

The process of labeling and organizing qualitative data to identify themes.

collateral security

An asset pledged to a lender that must be sold off to pay a debt if the loan is not repaid.

collective bargaining

The process of negotiating employment terms between an employer and a group of workers.

collusion

Businesses agree to work together to restrict competition.

command economy

Economic resources owned and controlled by the state.

commission

A payment to a salesperson for each sale made.

competitive pricing

Pricing decisions based on the price set by competitors.

compressed working hours

Working full-time hours over fewer days.

conglomerate integration

Integration with a business in a different industry.

consumer

An individual who purchases goods and services for personal use.

consumer durable

A manufactured product that can be reused and is expected to last a long time.

consumer goods

Physical and tangible goods sold to consumers.

consumer market

The selling of products by businesses to the final end user.

consumer products

Goods or services sold to end users.

consumer profile

A quantified picture of a business's consumers.

consumer services

Non-tangible products sold that are not intended for resale.

contribution

A part made towards covering indirect or overhead costs.

contribution-cost pricing

Setting prices based on the variable costs of making a product.

contribution costing

Costing method that allocates only direct costs to cost centres, not overhead costs.

contribution per unit

The price of a product less the direct costs of producing it.

control

To measure and supervise an employee's performance.

cooperative

A jointly owned business operated by members for mutual benefit.

corporate culture

The values, attitudes, and beliefs of people working in an organization.

corporate objectives

Well-defined goals set for the whole company.

cost centre

A section of a business that incurs costs.

cost of sales

The direct cost of goods sold during the financial year.

cost-plus pricing

Setting a price by adding a fixed profit mark-up to total unit costs.

credit control

Monitoring of debts to ensure credit periods are not exceeded.

credit purchases

Value of materials bought on credit.

crowd funding

Using small amounts of capital from a large number of individuals to finance a new business.

current assets

Assets likely to be turned into cash within 12 months.

current liabilities

Debts usually paid within one year.

curriculum vitae (CV)

A detailed document highlighting a person's professional and academic achievements.

customer

An individual or business that purchases another company's goods.

customer orientation

An approach that bases product decisions on consumer demand.

customer relationship marketing (CRM)

Using marketing activities to build good customer relationships.

customer value pricing

Pricing reflects what people are prepared to pay.

debentures

Long-term bonds issued to raise debt finance.

decision tree

A diagram that sets out options and outcomes related to a decision.

demand

The quantity of a product that consumers are willing and able to buy at a given price.

demerger

Separating one business unit from another.

democratic management

A management style encouraging worker participation in decisions.

demographic

Relating to the structure of the population.

depreciation

The decline in the estimated value of a non-current asset over time.

destroyer pricing

Reducing prices to eliminate competition.

development

Gaining new skills and knowledge.

digital distribution

Delivering digital media content.

digital promotion

Promoting products using digital technologies.