business key vocab

• dog 


  product has low market share in a low growth market
• cash cow


  product has a high market share in a low growth market
• a question mark


  product has a low market share in a fast growth market
• star


  product has a high market share in a fast growth market
• unlimited liability


  personal possessions of the owners of a business are at risk of being used to settle the business's debts. there is no limits to the amount of money the owners may have to pay out
• partnership 


  occurs when two or more people join together in a business enterprise to pursue profit
• deed of partnership


  an agreement between partners that sets out the rules of the partnership, such as how profits will be divided and how the partnership will be valued if someone wants to leave
• shareholder


  person or organisation that owns a share of a company.
• limited liability 


  exists when the owners' responsibility for the business's debts is only the amount they invested
• private limited company 


  is a business owned by its shareholders whose shares can't be freely traded on the stock exchange
• public limited company 


  a large business owned by its shareholders and its shares can be sold freely on the stock exchange
• flotation


  occurs when a private limited company becomes a public limited company and has its shares listed on the stock exchange
• directors 


  appointed by shareholders to lead the management of the compnay
• fixed assets


  assets that a business keeps long term
• internal finance 


  inside the business. quick and easy to get money. it saves borrowing and having to pay back interest
• external finance


  outside the business. usually needs to be paid back; sometimes with high interest
• Absenteeism


  where employees are not at work because of choice or ill health
• aims 


  The overall goals of a business or organisation; what the business is trying to achieve
• average rate of return 


  The annual percentage profit that an investment makes compared to the cost of the investment

  ARR (%) = Average annual profit (total profit from the investment ÷ number of years) x 100 Initial cost of the investment
• batch production


  Method of production where groups or types of product are made at several stages
• Boston matrix 


  A method of classifying a business’s product portfolio to help future product planning
• break even


  Where total revenue is the same as total cost and zero profit is made
• buffer stock


  A quantity of stock kept in store to safeguard against unforeseen shortages or increases in demand
• capital


  The initial money that is needed to start a business that is normally linked to purchases of machinery and premises
• cash flow forecast


  The prediction of how much money will come into and out of a business over a future time period
• cash inflow 


  The money that comes into a business from sales and other source
• cash outflow


  The money leaving a business that it spends on raw materials, labour and other expenses
• centralisation


  Where business decision making and implementation take place at and from the business headquarters
• chain of command 


  Part of the structure of a business organisation which shows who is in charge of who
• closing balance (cash flow forecast)


  The total cash flow left at the end of a period
• commission


  The extra amount of pay workers receive as a percentage of their or the business’s sales
• competitive pricing 


  Where the price of a product is decided by comparing it to its rivals
• cost- plus pricing


  A pricing method where a business decides what price to charge, based only on the cost of its production and some extra to make a profit
• current assets


  Resources owned by a business that can easily be turned into cash
• current liability 


  Amounts that are owed by the business and which are due to be paid within the next twelve months
• decentralisation 


  Amounts that are owed by the business and which are due to be paid within the next twelve months
• defecit


  where the closing cash flow balance at the of a period is negative
• delayering


  A method of saving costs in an organisation by reducing the number of layers or levels in a hierarchy
• delegation 


  Where work, but not responsibility for the work, is given to another person
• direct marketing 


  A business promotes and sells products direct to the customer without using any other businesses as part of the distribution process