AIMS: The long term intentions of the business. They help to form the Business Objectives
Anything owned by the business – cash, stock, equipment, property etc ASSETS: Anything owned by the business – cash, stock, equipment, property etc
BALANCE SHEET: A statement showing a company’s assets and liabilities. Assets will ALWAYS equal liabilities
BREAK EVEN POINT: The point at which Total Revenue = Total Costs. The business is making neither a profit or a loss
The maximum amount a business can produce in a given period CAPACITY: The maximum amount a business can produce in a given period
CAPITAL: One of the 4 factors of Production - the money or investment needed to start up a business
CASH FLOW: The amount of money left in the bank each month after expenditures have been deducted from money coming in
CELL PRODUCTION: A method of production where workers act in small teams, each performing part of the production process
People or organisations to whom the business owes money CREDITORS: People or organisations to whom the business owes money
People or organisations who owe the business money DEBTORS: People or organisations who owe the business money
The desire to own a particular product or service DEMAND: The desire to own a particular product or service
Factors of Production: The 4 factors that are necessary in order for business to function: land, labour, capital, enterprise
Fixed Costs: Expenses that do not change in line with the amount produced. They have to be paid whether the business trades or not
Franchise: A business which trades under, but is not owned by, a well known brand name
Gross Profit: Sales Revenue – Cost of Sales this figure does not yet have overheads taken away from it
Direct Costs: Any cost that can be directly attributed to a specific part of the production process, or a department of the business
Indirect Costs: Any cost that can not be directly attributed to a specific part of the production process, or a department of the business
A continued rise in the prices of average goods within an economy Inflation: A continued rise in the prices of average goods within an economy
Marketing: The function that links the business with the customer, ensuring the customer gets the right product at the right price
Monopoly: A business that is the single producer of a specific product or service within a market
OBJECTIVES: The medium to long term targets or a business that help give it direction and purpose
Oligopoly: A situation where the market is dominated by a small number of large firms
Two or more people trading together as an organisation Partnership: Two or more people trading together as an organisation
A small to medium sized business that is usually owned by its founders Private Limited Company: A small to medium sized business that is usually owned by its founders
Private Sector: The part of the economy operated by firms who are owned by shareholders or private individuals
Calculated by taking costs away from revenue Profit: Calculated by taking costs away from revenue
Public Limited Company: A type of organisation that is owned by shareholders and has floated on the Stock Market
Sales Revenue: The value of sales made within a certain period: Revenue = Quantity Sold x Price
Industries that produce raw materials e.g. farming, fishing & mining Primary Sector: Industries that produce raw materials e.g. farming, fishing & mining
Industries that use raw materials to manufacture goods Secondary Sector: Industries that use raw materials to manufacture goods
An business that is owned and run by a single individual Sole Trader: An business that is owned and run by a single individual
The part of the economy that provides service industries Tertiary Sector: The part of the economy that provides service industries