Business Vocabulary Flashcards

These flashcards cover key business vocabulary terms and definitions to help with exam preparation.

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.

accounting rate of return (ARR)

Measures the annual profitability of an investment as a percentage of the average investment.

acid test ratio

Compares liquid assets to current liabilities.

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.

advertising

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

benchmarking

Comparing a business against the performance standards of the best businesses in the same industry.

blue ocean strategy

One that exploits uncontested market space through product differentiation and low cost.

break-even analysis

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

business cycle

The regular swings in output measured by real GDP that occur in most economies, varying from boom conditions to recession.

collusion

Businesses agree to work together and restrict competition by fixing prices and sharing contracts.

command economy

Economic resources are owned, planned, and controlled by the state.

consumer durable

A manufactured product that can be re-used and is expected to have a reasonably long life.

diversification

The process of selling different, unrelated goods or services in new markets.

e-commerce

The buying and selling of goods and services by businesses and consumers through an electronic medium.

equilibrium price

The price level at which demand is equal to supply.

external costs

The costs of an economic activity that are not paid for by the producer or consumer, but by the rest of society.

fiscal policy

Decisions about government expenditure, tax rates, and government borrowing.

franchise

The legal right to use the name, logo, and trading systems of an existing successful business.

human resource management (HRM) strategy

A long-term plan for the management of an organisation's human resources.

liquidity

The ability of a business to pay its short-term debts.

monopoly

A market in which there is only one supplier with no close competitors.

net cash flow

Estimated difference between cash inflows and cash outflows for a period.

opportunity cost

The potential benefits lost when one alternative is chosen over another.

overdraft

A credit that a bank agrees can be borrowed by a business up to an agreed limit.

profit margin ratio

The percentage of revenue that exceeds the costs of goods sold.

quality assurance

A system of agreeing and meeting quality standards at each stage of production.

sustainable development

Economic development that is conducted without depletion of natural resources.

trademark

A recognizable sign, design, or expression that identifies products or services.

zero defects

A way of thinking to ensure that products meet customer expectations every time.