Business Management pages 165 - 175

Verbal Communication

Exchange of information through spoken words

Written Communication

Transfer of messages using written text

Visual Communication

Use of images

Formal Communication

Official and structured flow of information within an organization

Informal Communication

Casual and unofficial exchange of information

Internal Communication

Messages shared within the business

External Communication

Messages sent outside the business

Vertical Communication

Flow of info up or down the hierarchy (manager ↔ employee)

Horizontal Communication

Exchange between people at the same level

Communication Channel

Medium through which the message is sent (email

Barriers to Communication

Obstacles like noise

Feedback

Response from the receiver that shows understanding or need for clarification

Effective Communication

Message is clearly received

Finance

Management of money and other assets within a business

Capital Expenditure

Spending on long-term assets like equipment or buildings

Revenue Expenditure

Spending on day-to-day operations

Cash Flow

Movement of money in and out of a business

Profit

Total revenue minus total costs

Gross Profit

Sales revenue minus cost of goods sold (COGS)

Net Profit

Gross profit minus expenses and taxes

Balance Sheet

Snapshot of a company’s assets

Income Statement

Shows revenue

Liquidity

Ability of a business to meet short-term obligations

Working Capital

Current assets minus current liabilities

Break-even Point

Output level where total cost equals total revenue (no profit or loss)

Fixed Costs

Costs that remain constant regardless of output

Variable Costs

Costs that change with output

Budgeting

Planning expected income and expenditure over a period

Variance

Difference between actual and budgeted figures

Depreciation

Decrease in value of fixed assets over time

Assets

Resources owned by a business (current or fixed)

Liabilities

Debts or obligations owed by the business

Equity

Owners’ investment plus retained earnings

Term

Definition

Verbal Communication

Communication using spoken words in person or through calls or meetings.

Advantages of Verbal Communication

Immediate feedback; conveys tone and emotion.

Disadvantages of Verbal Communication

No permanent record; can be misunderstood.

Examples of Verbal Communication

Meetings

Written Communication

Communication using written words in physical or digital form.

Advantages of Written Communication

Permanent record; can reach many; time to plan message.

Disadvantages of Written Communication

Slow feedback; tone may be misread; risk of overload.

Examples of Written Communication

Emails

Visual Communication

Communication through images

Advantages of Visual Communication

Simplifies complex ideas; engages audience; memorable.

Disadvantages of Visual Communication

Costly to produce; may need explanation; can mislead.

Examples of Visual Communication

Charts

Formal Communication

Structured messages following official hierarchy or channels.

Examples of Formal Communication

Reports

Informal Communication

Casual exchanges between colleagues outside official structure.

Examples of Informal Communication

Chatting at lunch

Upward Communication

Flow of information from employees to management (e.g.

Downward Communication

Flow of information from management to employees (e.g.

Lateral Communication

Exchange of information between people at the same level (e.g.