front 1 Added value | back 1 Difference between the selling price of a product and the cost of bought in materials and/or components |
front 2 Appreciation of Currency | back 2 The value of the currency rises so it buys more of another currency than before |
front 3 Autocratic leadership style | back 3 Managers takes decisions without consulting employees |
front 4 Automation / Capital Intensive | back 4 A system of production where machinery and technology carry out the work and few people are directly employed. |
front 5 Average cost / Cost Per Unit | back 5 Total cost of production divided by total output [OR] The cost of producing a single unit of output [OR] = Total Cost / Output |
front 6 Batch production | back 6 The production of goods whereby each batch of products passes through one stage of production at the same time before moving on to the next stage [OR] A production method where similar items are produced together and a whole batch moves through the different stages of production together [OR] Products are made in groups of items of a certain amount |
front 7 Board of Directors | back 7 Senior management of the business responsible for strategic decisions. |
front 8 Bonus | back 8 An additional payment above basic pay usually paid for performance exceeding a given target. |
front 9 Brand / Brand name | back 9 unique name of a product or business that distinguishes it from other products or businesses |
front 10 Brand image | back 10 The general impression, perception or reputation of a product that consumers have of the product or brand |
front 11 Break-even | back 11 Level of sales at which total costs is the same as total revenue [OR] Level of sales at which business makes no profit or loss [OR] Total revenue (TR) = Total cost (TC) [OR] The level of output at which Total revenue is equal to Total Cost |
front 12 Business cycle | back 12 Fluctuations in economic activity that an economy experiences over time [OR] Changes in level of economic growth over time [OR] A period during which a country or economy goes from growth to recession and back again [OR] The variation in national output over a period of time |
front 13 Business objective | back 13 A statement of a specific target that a business works towards [OR] A statement of a specific target that business wants to achieve in a specific period of time. |
front 14 Business plan | back 14 A document containing the business aims and objectives and other important details about the operations, finance and owners of a business [OR] A detailed written document outlining the purpose and aim of a business which is often used to persuade lenders or investors to finance a business proposal [OR] A document that states aims and objectives and shows how business plans to achieve them |
front 15 Capital | back 15 It is the fund available for a business to carry out its spending requirements [OR] A source of finance used by the business to acquire assets. |
front 16 Capital employed | back 16 Equity + Non-current liabilities [OR] Total value of capital used in the business [OR] Value of all long term finance invested in a business |
front 17 Capital intensive | back 17 Machinery is the key resource in the business rather than labour [OR] Products are produced using capital equipment more than labour |
front 18 Cash flow | back 18 It refers to the timing and amounts of cash moving in and out of a business. |
front 19 Cash flow forecast | back 19 An estimate of cash inflows and outflows of a business usually on a month by month basis [OR] Estimate of timings and amount of cash inflows and outflows over a given period of time or over months to come |
front 20 Chain of command | back 20 The structure in an organisation which allows instructions to be passed down from senior management to lower levels of management [OR] The route through which authority is passed down through an organisation [OR] Shows how communication and tasks are passed down the business from the top to the bottom |
front 21 Competitive Market | back 21 A market with a large number of businesses selling similar products which are targeted at the same group of consumers. |
front 22 Competitive pricing | back 22 When a product is priced in line or just below competitors’ prices to try to capture more of the market [OR] Setting a price similar to that of competitors products which are already established in the market [OR] When the price of a good is set at the same level as other products in the market and at a level customers expect or are willing to pay |
front 23 Cost effective | back 23 Cost effective implies that return on money spent is high enough to justify the spending. |
front 24 Cost of sales | back 24 Cost of producing or buying in the goods sold by the business during a period of time [OR] Variable cost of making the goods sold [OR] Cost per unit x number of output sold [OR] Opening inventory + purchases – closing inventory |
front 25 Cost plus pricing | back 25 The price is based on the cost of making a product and the addition of a fixed percentage for profit/mark up. [OR] The cost of manufacturing the product plus a (profit) mark-up [OR] = [total cost / total number of units] + % mark up |
front 26 Crowd-funding | back 26 Asking a large number of people each for a small amount of money to raise finance for a project |
front 27 Current assets | back 27 Current assets refer to those assets owned that can be quickly converted into cash. |
front 28 Current liabilities | back 28 Short-term debts owed by a business, to be repaid in less than one year [OR] Debts of a business which it expects to pay before the date of the (next) statement of financial position |
front 29 Customer loyalty | back 29 Likelihood of previous customers returning to buy goods or services from a business. [OR] Customers keep buying from a particular shop, business or buy one particular product, rather than use other shops or buy products made by other businesses. |
front 30 Delegation | back 30 Giving a subordinate the authority to perform particular tasks [OR] When a manager gives authority to another employee to complete a task |
front 31 Democratic leadership style | back 31 Employees are consulted before decisions are made. This is a form of two way communication. |
front 32 Depreciation of an exchange rate | back 32 A currency’s value falls against another currency [OR] The value of the currency goes down with respect to another currency [OR] When the value of a currency falls and it buys less of another currency than before |
front 33 Dismissal | back 33 Termination by the employer because the employee has broken company rules or is not performing work to the required standard [OR] When the employment is ended against the will of the employee, usually for not working in accordance with the employment contract [OR] When employee told or made to leave their job because their work or behaviour is unsatisfactory. |
front 34 Dividends | back 34 Payment to shareholders from profits of a company [OR] Return to shareholders for investing in the company |
front 35 E-commerce | back 35 Process of buying and selling over the Internet |
front 36 Economic boom | back 36 Strong rise in level of economic activity [OR] Period of time when GDP rising rapidly |
front 37 Economic growth | back 37 When a country’s GDP increases and more goods and services are produced than in the previous year |
front 38 Economies of scale | back 38 Factors that lead to lower average costs as a business increases in size [OR] Reduction in average costs as a result of increasing the scale of operations |
front 39 Effective communication | back 39 Effective communication means that information sent by a source is received and the recipient provides feedback/understood. |
front 40 Efficiency / efficient | back 40 To achieve objectives in a cost-effective manner using minimum resources possible. |
front 41 Entrepreneur | back 41 A person who takes the risk for a new business venture [OR] An individual who takes the financial risk of starting and managing a new business. |
front 42 Ethical business | back 42 An organisation that takes decisions based on a moral code [OR] The moral judgements that a business makes about their behaviour, and the way they operate and interact with their stakeholders. |
front 43 Exchange rate | back 43 Value or price of one currency in terms of another currency [OR] The rate at which one country’s currency can be exchanged for that of another. |
front 44 External cost | back 44 Costs paid for by the rest of society, other than the business, as a result of business activity [OR] The negative impact of a business decision on society [OR] Costs that fall on third parties that are not directly involved in the production process. |
front 45 Externalities | back 45 Third party effects arising from production or consumption of goods and services for which no appropriate compensation is paid [OR] Advantages or disadvantages that fall on third parties that are not directly involved in the production process [OR] The effect of business activities on unrelated parties. |
front 46 Feedback / Communication Feedback | back 46 It is a response from a receiver to a source to indicate that a message has been received and understood. |
front 47 Financial benefit | back 47 Monetary benefit achieved by the business [OR] Profit that the business makes. |
front 48 Financial Bonus / Bonus | back 48 Extra money for performance that is in excess of target and above basic pay. |
front 49 Financial budget | back 49 A financial budget is a numerical or quantitative plan showing future financial targets, goals or limitations for a specific time period. |
front 50 Fixed cost | back 50 Costs that do not change with the level of output or sales [OR] Costs that do not vary in the short run with the number of items sold or produced |
front 51 Flow production | back 51 Where large quantities of a product are produced in a continuous process [OR] The production of very large quantities of identical goods using a continuously moving process. |
front 52 Focus group | back 52 Customers or people who have similar characteristics to the target market who give their opinions on a product [OR] Selection of people who have similar characteristics to target market and who give their opinions on a product. |
front 53 Franchise | back 53 An agreement that allows one business to trade under the name of another business to sell the other company’s products or services [OR] A business based upon the use of the brand names, promotional logos and trading methods of an existing successful business. The franchisee buys the licence to operate this business from the franchisor [OR] A business system where entrepreneurs buy the right to use the name, logo and product of an existing business. |
front 54 Global business | back 54 A global business is one that operates worldwide in terms of markets, employment, contacts, stakeholders and distribution [OR] A business that operates in many countries around the world in addition to its home country. |
front 55 Globalisation | back 55 Increase in worldwide trade and movement of people and capital between countries [OR] The process by which countries are connected with each other because of the trade of goods and services [OR] The growth in worldwide trade [OR] Freer movement of people and capital between countries [OR] The process of countries becoming more interconnected. |
front 56 Gross Domestic Product | back 56 The total value of output of goods and services produced in a country in one year or at a given point in time. |
front 57 Highly motivated | back 57 It implies that workers have a positive work attitude [OR] It is reflected by job satisfaction, enjoyment and enthusiasm of the employee. |
front 58 Human Resources manager | back 58 It is a manager in charge of the people side of a business. This would include recruitment, development and utilisation of the human resources. |
front 59 Import quota | back 59 Limit on the number of goods allowed into a country [OR] |
front 60 Quota | back 60 It refers to a limit on the flow of goods that are allowed into a country |
front 61 import tariff | back 61 Tax on goods brought into a country [OR] Tax charged on imported goods |
front 62 Income statement | back 62 A financial document that records the revenue, costs and profit for a given period of time. |
front 63 Induction training | back 63 Introduction given to new employees explaining the businesses activities, customs and procedures and introducing them to other workers [OR] A training programme to help new recruits become familiar with their workplace, the people they work with and the procedures they need to follow. |
front 64 Inefficient | back 64 Input output ratio is low or not maximising productivity. |
front 65 Inflation / Rising inflation | back 65 It refers to the increase in general prices over a period of time. [OR] It implies that prices are at an increasing rate or increasing rapidly. |
front 66 Internal communication | back 66 Messages between employees working in the same organisation |
front 67 Inventory (stock) | back 67 The amount of raw materials, work in progress, and finished goods stored by a business which intended to be sold later. |
front 68 Job description | back 68 It outlines the responsibilities and duties expected to be done by someone employed to do a specific job. |
front 69 Job enrichment | back 69 Involves adding tasks to the job that require higher skill or more responsibility |
front 70 Job production | back 70 Where a single product is made at a time [OR] Makes one product from start to finish before starting the next one [OR] Producing a personalised product individually. |
front 71 Job rotation | back 71 Employees swapping around and doing each specific task for only a limited time [OR] Process of switching an employee between jobs over a period of time [OR] Increasing variety in the workplace by allowing workers to switch from one task to another. |
front 72 Joint venture | back 72 When two or more businesses agree to start a new project together and share risks, capital, profits or resources. |
front 73 Labour intensive | back 73 It implies that labour resource input is the key resource used in the business rather than capital equipment [OR] It also implies that labour costs are the dominant cost of the business. |
front 74 Level of hierarchy | back 74 A level of authority in a business structure [OR] Managers, supervisors or other employees who are given a similar level of responsibility in an organisation |
front 75 Limited company | back 75 A business which has a separate legal identity or status to its owners [OR] A business with a limited liability for owners |
front 76 Limited liability | back 76 Liability of shareholders in a company is only limited to the amount they invested [OR] Shareholders only risk losing the amount they have invested in the company and not any of their personal wealth. |
front 77 Liquidity | back 77 Ability of a business to pay back its short-term or day to day debts [OR] ability of a business to pay its current liabilities using its current assets [OR] A measure of how quickly a business can turn current assets into cash to pay short term debts. |
front 78 Loss leader | back 78 It is a product sold below cost price in order to encourage customers to buy other products sold by the business. |
front 79 Low profit margin | back 79 It means that the profit per unit of sales revenue is small. |
front 80 Managing Director | back 80 Managing director is the overall senior director with general responsibility for the business as a whole. |
front 81 Margin of safety | back 81 Difference between current level of output and break-even output. [OR] Difference between current level of sales and break-even sales. |
front 82 Market economy | back 82 An economy in which the Government has no or very less control over the factors of production [OR] An economy which allows markets to decide the allocation of resources. |
front 83 Market leader | back 83 Business with largest percentage of total sales revenue and share of the market [OR] Business with the biggest share of market for a product. |
front 84 Market orientated company | back 84 A business that focuses on the needs and requirements of its customers through analysis of market research data. [OR] A company that does market research before manufacturing or supplying a product. |
front 85 Market research | back 85 Process of gathering, analysing and interpreting information about the market [OR] Process of collecting, recording and analysing data about customers, competitors and market for a product. |
front 86 Market segment | back 86 An identifiable sub-group of a whole market in which consumers have similar characteristics or preferences. |
front 87 Market segmentation | back 87 Dividing the whole market into segments by consumer characteristics and then targeting different products to each segment [OR] Identifying a subgroup of a whole market in which consumers have similar characteristics or preferences. |
front 88 Market share | back 88 Percentage or proportion of the total market sales made by one brand or business [OR] = Business sales / Total market sales × 100 |
front 89 Marketing | back 89 Identifying and anticipating customer wants and then providing it. |
front 90 Marketing budget | back 90 A financial plan for the marketing of a product or product range for a specified period of time [OR] The amount of money made available by a business for its marketing activities during a particular period of time. |
front 91 Marketing mix | back 91 All activities that go into the marketing of a product. These activities are often summarised as the four P’s which are product, promotion, place and price. [OR] Four marketing decisions (Product, Price, Place and Promotion) needed for the effective marketing of a product [OR] The combination of product, price, promotion and place that determines how a firm markets itself to its customers and potential customers. [OR] Blend of product, price, promotion, and place, designed to attract customers. |
front 92 Marketing strategy | back 92 Plan to use the right combination of the marketing mix to achieve a particular marketing objective [OR] A plan of action designed to promote and sell a product or service to achieve a set goal [OR] A plan for promoting products to enter a new market. |
front 93 Mass market | back 93 Selling the same product to the whole market. |
front 94 Micro-finance | back 94 Small amounts of capital loaned to entrepreneurs in countries where finance is difficult to obtain [OR] Small loans to people not traditionally served by banks [OR] Loan to poor people not traditionally served by banks. |
front 95 Mixed economy | back 95 An economy that has both a private and public sector [OR] An economy where businesses are owned and run by both the state and individuals [OR] An economy where resources are allocated by both individuals and the government. |
front 96 Motivation | back 96 Reason or factor why employees want to work hard and work effectively for the business [OR] Desire to work hard and feel satisfied by doing so. |
front 97 Multinational company | back 97 A business with factories, production, or service operations in more than one country [OR] A business with production or service operation in another country outside its normal area of operation. |
front 98 Net cash flow | back 98 Difference between the cash inflows and cash outflows [OR] = Cash Inflows - Cash Outflows |
front 99 Net profit / Profit | back 99 It is the total amount of money that business makes once all costs have been subtracted from sales revenue [OR] = Total revenue – total cost |
front 100 Net profit margin | back 100 It is a measure of the profitability of sales. It calculates the proportion of sales value that is represented by profit. [OR] = Net Profit/Sales × 100 |
front 101 Niche market | back 101 A small specialised segment of a much larger market [OR] It Involves selling goods to small clearly identifiable segments of a market [OR] A highly specialised subpart of a larger market. |
front 102 Non-current assets / Fixed assets | back 102 Resources owned by a business which will be used for a period longer than one year [OR] Items owned by a business for more than one year. |
front 103 Non-current liabilities | back 103 Debts of a business which will be payable after more than 1 year [OR] items owed by the business for more than one year. |
front 104 Off the job training | back 104 Training that takes place away from the workplace usually by a specialist trainer or trainers [OR] Training that takes place away from the workplace, for example at college, university or a specialist training providers premises [OR] Training that takes place away from the place of work using methods such as courses/conferences/online learning. |
front 105 One-way communication | back 105 It implies that a message from sender to receiver requires no feedback or response. |
front 106 On the job training | back 106 Training at the place of work, watching or following an experienced employee [OR] Training at the place of work where usually the person does the actual job while an experienced employee observes and guides him or her, making corrections as required. |
front 107 Opening Cash balance | back 107 Amount of cash held by a business at the start of the month or year |
front 108 Opportunity cost | back 108 Next best alternative forgone [OR] The next best alternative given up by choosing another item [OR] The benefit that could have been gained from an alternative use of the same resource [OR] A benefit, profit or value that a firm has to give up in order to achieve something else. |
front 109 Organisational structure | back 109 Refers to the levels of management and division of responsibility within an organisation [OR] The formal internal framework of a business that shows how it is managed and organised [OR] The number of levels of management and division of responsibility and authority within a business. |
front 110 Partnership | back 110 Two or more people who agree to jointly own a business together [OR] An unincorporated business that has more than one owner. |
front 111 Penetration pricing | back 111 Price is set lower than competitor’s prices in order to be able to enter a new market or launch a new product. |
front 112 Performance related pay | back 112 Pay is based upon some assessment of how well an individual is carrying out their job tasks. It is a form of payment by results. |
front 113 Piece rate | back 113 Payment system where workers are paid depending on the quantity of products they have produced [OR] Employees are paid per unit of output and not by per hour. |
front 114 Pressure group | back 114 Groups of people who act together to try to force businesses or governments to adopt certain policies [OR] Organisation of like-minded people who put pressure on businesses and the government to change their policies to reach a predetermined objective [OR] A group that campaigns on a range of social causes and tries to influence business behaviour. |
front 115 Price elastic demand / Price Elastic | back 115 Change in demand is greater than change in price [OR] Percentage change in product demanded is greater than the percentage change in price of the product. |
front 116 Primary market research | back 116 Collection of new data about potential and existing customers. |
front 117 Primary sector businesses | back 117 Firms whose business activity involves the extraction of raw materials [OR] Businesses that extract the natural resources or produce raw materials that are then used by other businesses [OR] Businesses involved in extraction or production of raw materials. |
front 118 Private limited company | back 118 A business owned by shareholders, but they cannot sell shares to the public. [OR] A business owned by shareholders, but they can only sell shares to friends or family. [OR] A small to medium-sized business owned by shareholders who have limited liability. |
front 119 Private sector | back 119 When business activities are owned by individuals or groups of individuals. |
front 120 Product life cycle | back 120 It refers to the changes in the level or pattern of sales of a product over time. |
front 121 Product orientated / Product Orientated Company | back 121 Business that focuses on making the product first and then tries to find customers to buy it. |
front 122 Productivity | back 122 A measure of the output of a business in relation to its inputs [OR] Effective utilisation of resources in a time period [OR] = Output divided by Input. |
front 123 Public corporation | back 123 A business that is owned and controlled by the government. |
front 124 Public limited company | back 124 Businesses owned by shareholders, and they can sell shares to the public using the stock exchange [OR] A large company, owned by shareholders who have limited liability. The company can sell its shares to the general public [OR] A company that sells its shares to the general public through a stock exchange |
front 125 Public sector | back 125 Part of the economy controlled by the government. |
front 126 Quality assurance | back 126 Checking for quality standards throughout the production process. |
front 127 Quality control | back 127 Checking that a product meets the required standard [OR] Checking of goods at the end of the production process [OR] Checking the standard of goods through inspection. |
front 128 Recession | back 128 When there is a period of falling gross domestic product / GDP [OR] A sustained reduction in GDP for an economy. |
front 129 Redundancy / Made redundant | back 129 When an employee is no longer needed because the job no longer exists |
front 130 Retained profit | back 130 Net profit reinvested back into business after tax and dividends. |
front 131 Return on Capital Employed | back 131 Profit as a percentage of capital employed [OR] = (Profit/Capital employed) x 100 [OR] Profit made on each dollar invested in the business. |
front 132 Revenue | back 132 Money coming in from selling a product over a given period of time [OR] Amount of money a business earns from the sale of its products [OR] Income of the business from the sale of goods or services [OR] = Selling Price x Quantity sold. |
front 133 Secondary market research | back 133 Gathering information that has already been collected by others and is available for use by others [OR] The collection of data from second hand sources such as the Internet, government agencies and other businesses. |
front 134 Secondary sector | back 134 Firms that process and manufacture goods from natural resources [OR] Manufacture goods using the raw materials provided by the primary sector [OR] Uses manufacturing to transform the raw materials generated in the primary sector into a product. |
front 135 Shareholder | back 135 Shareholders are the owners of a limited company. |
front 136 Shareholders’ equity / Shareholder's Funds | back 136 Total sum of money invested into the business by the owners of the company [OR] = Share capital plus reserves [OR] = Total assets - Total liabilities [OR] Value of equity capital plus reserves. |
front 137 Social enterprise | back 137 Business with both social objectives as well as aim to make a profit [OR] Organisation whose main objective is social welfare and any profit made is reinvested back into the business. |
front 138 Sole trader | back 138 Unincorporated business owned and controlled by only one person [OR] Ownership of business in the hands of one person. |
front 139 Span of control | back 139 Number of subordinates working directly under an individual or manager [OR] Number of subordinates reporting to each supervisor or manager. |
front 140 Specialisation | back 140 When people and businesses concentrate on what they are best at [OR] Way in which work is divided so each worker concentrates on a specific task and become an expert at it. |
front 141 Stakeholder group | back 141 Any individual or group which has a direct interest in a business because they are affected by its activities or decisions [OR] Any group or person with a direct interest in the performance / activities of a business [OR] A person who affects the business or is affected by the business. |
front 142 Statement of financial position / Balance Sheet | back 142 It shows the value of a business’ assets and liabilities at a particular point in time [OR] An accounting statement that records assets, liabilities, and owners’ equity of a business at a particular date. |
front 143 Sustainable development | back 143 A development which does not put the living standards of future generations at risk [OR] Ability to meet the needs of the present population without compromising the ability of future generations to meet their own needs. |
front 144 Target market | back 144 Specific group or segment of customers that the product is directed at. |
front 145 Tertiary sector | back 145 Business or industry which provides or sells services to consumers |
front 146 Maturity stage of a product life cycle | back 146 It is a stage when the sales of a product are at its peak. |
front 147 Time rate / Paid by time rate | back 147 Worker are paid per hour instead of a fixed salary [OR] Receive a set amount of pay for every hour worked |
front 148 Total cost | back 148 Fixed costs and variable costs combined [OR] All the variable and fixed costs of producing the total output [OR] = Total Fixed costs + Total Variable costs |
front 149 Trade receivables | back 149 Amount of money owed by customers for goods bought on credit terms. |
front 150 Trade union | back 150 Group of workers who join together to ensure their interests are protected [OR] Organisation that represents the workers and fights for improvements to pay and conditions. |
front 151 Unemployment | back 151 When people want to work but cannot find a job [OR] The proportion or percentage of the population that are capable of working but are unable to find a job. |
front 152 Variable costs | back 152 Costs that change with the level of output produced or sales made [OR] Costs which vary directly with the number of items sold or produced [2] Costs that change in direct proportion to output. |
front 153 Wholesaler | back 153 A business that buys and stores large quantities of several producers’ goods and then breaks into bulk deliveries to supply retailers with smaller quantities. |
front 154 Working capital | back 154 Amount of capital available to a business to pay its day-to-day expenses [OR] The capital needed to finance the day to day running expenses and pay the short-term debts of the business [OR] = Current assets – Current liabilities |