grade 11 eoy business

Above the line (ATL) promotion

Form of promotion that refers to any form of paid-for promotional technique through independent consumer media.

Absorption costing

A quantitative method of calculating the cost of a product by taking into account both indirect expenses (overhead costs) as well as direct costs (cost of sales).

Academic journals

Also known as scholarly journals, these are publications that contain the latest educational research and academic theory.

Accumulated depreciation

This refers to the accrued value of non-current assets, most of which fall in value over time due to depreciation.

Acid test ratio

Also known as the quick ratio, this short-term liquidity ratio measures an organization's ability to pay its short-term debts without having to sell any stock (inventories).

Acquisition

A method of external growth that involves one company buying a majority stake in another company with the agreement and approval of the target company's Board of Directors.

Ad-hoc market research

Market research conducted as and when required for a specific problem that the organization is facing.

Adding value

The process of producing a particular good or service that is worth more than the cost of the resources used to produce it.

Adverse variance

This discrepancy in the budget occurs when profit is lower than expected, due to costs being higher than expected and/or revenues being lower than predicted.

Advertising

A form of visual and/or audio marketing communication used to inform and persuade people to buy a certain good or service.

Agents

Also known as brokers, these independent intermediaries help to sell a vendor's products in return for commission, e.g., real estate agents.

Ansoff matrix

A strategic management tool, used to devise product and market growth strategies for an organization.

Arbitration

Method of stakeholder conflict resolution with all stakeholder groups in conflict agreeing to accept the decision or judgment of the independent arbitrator.

Assets

The possessions owned by a business, which have a monetary value, e.g., buildings, land, machinery, equipment, inventories, and cash.

Average costs

This is the cost per unit of output. It is calculated by the formula: AC \= TC ÷ Q

Average rate of return (ARR)

Also referred to as the accounting rate of return, this method of investment appraisal calculates the average annual profit of an investment project expressed as a percentage of the amount of invested.

Average revenue

This is the amount a business receives from its customers per unit of a good or service sold. Mathematically, AR \= TR ÷ Q \= P

Backwards vertical integration

A method of external growth that involves a company buying another company that is further away from the consumer in the chain of production.

Bad debt

This occurs when a debtor is unable to pay outstanding invoices to the business. The result is it reduces the cash inflows for the vendor (seller).

Balance sheet

Also known as the statement of financial position, this set of final accounts shows the value of a firm's assets, liabilities, and the owners' investment (or equity) in the business, at a particular point in time.

Bankruptcy

Sometimes referred to receivership or corporate liquidation, this means a situation when a person or business declares that they can no longer pay back their debts, so the entity collapses (fails).

Bar graphs

Used to compare figures in a study, such as sales figures during different time periods. They are useful for presenting frequencies and for ease of comparison.

Below the line (BTL) promotion

Form of promotion that refers to all forms of advertising or promotion that do not use external media agents.

Boston Consulting Group (BCG) matrix

A management tool used to examine the product portfolio of a business by determining whether each product has high or low market share in a market that has high or low market growth.

Brand

A brand is the registered name used to identify a product of a particular business organization.

Brand awareness

The degree of customer knowledge and recognition of a particular brand in order to gain more customers.

Brand development

Part of a firm's marketing strategy in communicating the value of a brand and what the brand stands for.

Brand loyalty

The degree of customer devotion to a particular brand.

Brand switching

This is the opposite of brand loyalty and occurs when consumers turn to alternative brands, mainly because the original brand has lost some of its former appeal.

Brand value

The expected earning potential of a brand, i.e., the likely future earning potential (value) of a particular brand.

Branding

This is the practice of using an exclusive name (brand), symbol, or design which identifies a specific product or business.

Budget

A detailed financial plan for the future, usually involving the expected costs and revenues or a cash flow forecast, for a pre-determined period of time.

Budgetary control

The financial methods used to attempt to balance actual outcomes with budgeted outcomes. This is achieved by systematic observations and corrective measures to minimize variances.

Business

A decision-making organization established to produce goods and/or provide services.

Business angels

Wealthy and successful private individuals who risk their own money in a business venture that has high growth potential.

Business plan

An official document with details of an organization and the proposals for reaching its aims and objectives (goals).

Capital employed

The value of all sources of finance for a business, including internal and external finance.

Capital expenditure

A business organization's spending on the purchase or acquisition of fixed assets, e.g. spending on buildings (premises), machinery, equipment and tools.

Capital expenditure

Refers to business spending on fixed assets or capital equipment of a business.

Cash

The money a business has, either "in hand" (at its premises) and/or "at bank" (i.e., in its bank account). It is the most liquid of a firm's current assets and is easily accessible.

Cash

This refers to the money an organization has either "in hand" (at its premises) and/or "at bank" (i.e., in its bank account). It is the most liquid type of current assets.

Cash cows

Products that enjoy high market share in a low growth (mature) market. They are the products that earn a business the most sales revenues.

Cash flow

The movement of an organization's cash inflows (cash received from the sale of goods and services) and cash outflows (used to pay for the costs of running the business).

Cash flow forecasting

A quantitative technique used to predict how cash is likely to flow into and out of the business for a particular period of time.

Cash flow problems

These are liquidity issues that arise when an organization has insufficient funds to run its business, i.e., when net cash flow is negative.

Cash inflow

Refers to the money coming into a business from earnings (sales revenue) and other sources of finance, such as crowdfunding.

Cash outflow

Refers to the money going out of a business to pay for its costs, such as the purchase of raw materials or the payment of wages and salaries.

Closing balance

Found in a cash flow forecast, this refers to the value of cash held by a business at the end of a trading period (usually on the last trading day of the month).

Collateral

Refers to the financial guarantee, using a firm's fixed assets, for the purpose of securing loan capital.

Companies (corporations)

This refers to any business organization that is owned by its shareholders, who have limited liability. They comprise of privately held companies and publicly held companies.

Competitive advantage

Refers to any factor that enables a business to be more appealing to customers, such as having a unique selling point, or being able to produce goods or services better or cheaply than its rivals.

Competitive pricing

This pricing method involves a business setting the price of its products at the same or similar level charged by competitors in the market.

Competitors

These are the firm's rivals, which operate in the same industry and contest for the same customers.

Conciliation

Method of stakeholder conflict resolution which aims to align the incompatible interests of different stakeholder groups by helping different parties to better understand each other's interests.

Conflict

This refers to the mutually exclusive and incompatible interests of different stakeholder groups. If this is not managed, it often leads to protracted disagreements, disputes, and arguments in the workplace.

Conglomerate

This form of external growth occurs when two or more businesses in unrelated industries integrate through a merger, acquisition, or takeover.

Consumer panel

A focus group comprised of people who belong to the firm's target segment(s), referred to in order to gather their expert feedback.

Consumer profiles

The demographic and psychographic characteristics of consumers in different market segments.

Consumers

The individuals or organizations that actually use a product.

Consumers

The individuals or organizations that actually use a product.

Contribution

Refers to the difference between a firm's sales revenue of a product it sells and the variable costs of production.

Contribution costing

A quantitative technique used to calculate how many items need to be sold to cover all the firm's costs (both variable and fixed costs).

Convenience sampling

Sampling method that refers to the practice of using people that are within easy reach, in an unplanned way, to conduct market research.

Cooperatives

These are for-profit social enterprises owned and run by their members (usually employees, managers or customers). Their primary goal is to create value for their member-owners.

Copyrights

These intangible assets give the registered owner the legal rights to creative pieces of work, such as the works of authors, musicians, conductors, playwrights (scriptwriters) and directors.

Corporate social responsibility (CSR)

This is an organization's decisions and actions that impact society in a positive way.

Correlation

Used to determine the relationship between data sets. It is a statistical process of establishing a relationship (or connection) between two or more variables.

Cost centre

A section or division of a business that has responsibility for its own operational costs. It is held accountable for its departmental expenditure.

Cost leadership

A generic strategy that aims to establish a competitive advantage by achieving the lowest operational costs in the market for a particular good or service.

Cost-plus pricing (or mark-up pricing)

Adds a profit margin to the costs of production, thereby ensuring that each unit sold contributes towards the profits of the firm.

Costs

The charges that an organization incurs from its operations, e.g., rent, wages, salaries, and insurance.

Costs of sales (COS)

These are the direct costs of production, such as the cost of raw materials, component parts, and direct labour.

Credit control

The process of monitoring and management of debtors, such as ensuring only suitable customers are given trade credit and that customers do not exceed the credit period.

Creditor days ratio

The efficiency ratio that measures the average number of days an organization takes to repay its creditors (suppliers who the business has bought products from using trade credit, so have yet to pay for these).

Crowdfunding

Rising finance for a business venture or project by getting small amounts of money from a large number of people, usually through online platforms.

Cumulative net cash flow

The sum of an investment project's net cash flows for a particular year plus the net cash flows of all previous years.

Current assets

Short-term assets belonging to an organization which will last in the business for up to 12 months, e.g., cash, debtors, and stock (inventory).

Current assets

The short-term assets (belongings) of an organization that can be relatively easy to convert into cash, i.e. cash, stocks (inventory), and debtors.

Current liabilities

The short-term debts of a business, which need to be repaid within twelve months of the balance sheet date, e.g., overdrafts, trade creditors and short-term loans from banks.

Current liabilities

These are the short-term debts of a business, which need to be repaid within twelve months of the balance sheet date. Examples include bank overdrafts, trade creditors, and other short-term loans.

Current ratio

A short-term liquidity ratio used to calculate the ability of an organization to meet its short-term debts (within the next twelve months of the balance sheet date).

Customer loyalty schemes

These are marketing strategies used to attract customers to remain devoted to a brand or business by offering rewards and other incentives for repeat purchases.

Customer retention

This is a measure of customer loyalty by determining the extent to which existing customers will stick to the same brand when making future purchasing rather than switching to a rival brand.

Customers

The individuals or organizations that purchase a product.

Customers

The individuals or organizations that purchase a product.

Customers

These are the firm's clients, individuals and other businesses, who purchase the organization's goods and/or services. Their interests include competitive prices, fit-for-purpose products and overall value for money.

Cyclical variations

The recurring fluctuations in sales revenues due to the trade cycle (or business cycle).

Debtor days ratio

The efficiency ratio that measures the average number of days an organization takes to collect debts from its customers (as they have bought goods and services on trade credit but have yet to pay for these).

Debtors

A category of current assets, these are individuals or businesses that owe money to the organization because they have bought products on trade credit, so typically need to pay within 30 and 60 days.

Debtors

A type of current asset, referring to individual or business customers that owe money to the organization as they have bought goods or services on trade credit, i.e., they need to pay within 30 and 60 days.

Deed of Partnership

A legally binding contract that all joint owners of a partnership sign, stating the purpose of the business, the formal rights of the partners, and how any profits should be split.

Demerger

This occurs when a company sells off a part of its business, thereby separating into two or more separate entities. This often happens due to conflicts and inefficiencies of two or more firms previously in a merger agreement, such as culture clashes.

Demographic segmentation

The process of splitting consumers according to statistical characteristics of the population, such as age, gender, family size, religion, and ethnicity.

Depreciation

The fall in the value of a fixed asset over time, mainly due to wear and tear (usage) and obsolescence.

Descriptive statistics

Quantitative tools used to summarise and present statistical data in a user-friendly way.

Differentiation

A generic strategy that involves a firm making its products distinct from those of its competitors, such as through quality, functionality, packaging, or branding

Differentiation

The process of distinguishing an organization's products from those of other firms in the same industry.

Direct costs

Costs that are clearly associated with the output or sale of a certain good, service or business operation, e.g., raw materials.

Direct mail

The use of postal correspondence for promotional purposes.

Direct marketing

Refers to a business communicating information about its products straight to customers.