business definitions

• Adverse varience

  When actual costs are higher than budget costs
• Autocratic


  When the manager makes all the decisions
• Bank overdraft


  The amount that can be overspent on a bank account (be overdrawn)
• Blake mouton grid

  The concern for people and production a manager has
• Boston matrix


  Product portfolio analysis of a business into 4 categories
• Branding

  how consumers recognise and identify with a product
• Break-Even

  The point when total sales is equal to total costs
• Budget

  Income and costs predicted over a period of time
• Buffer inventory


  Minimum amount of stock a business requires to operate
• Capacity utilisation


  The amount of total capacity is being used
• Cash flow


  Cash moving into and out of a business
• Cash flow forecast

  The projection of likely cash inflows and outflows
• Competition


  Other businesses that compete for a share in the same market
• Competitiveness


  The business' ability to offer a better product than its competitors (measured in customers)
• Correlation


  Relationship between two variables
• Total Contribution


  The difference between the total sales and total variable costs
• Delegation

  Where a responsibility or task is passed onto another employee in the business
• Demand


  Amount of a good or service that customers desire
• Democratic

  Leadership management when the manager involves the employees to make a decision
• Distribution channel


  How the business gets its products to the end consumer
• Dividend


  x
• Elasticity of demand

  Responsiveness of demand towards the change of price
• Extrapolation

  Using previous data to predict future data
• Favourable variance


  When the actual is higher than budgeted results
• Fixed costs

  Costs that do not vary with the level of output
• Gross profit

  Revenue - cost of sales
• Hierarchy

  The structures and levels of management and supervision within a business
• Income elasticity of demand

  The responsiveness of demand to a change of income
• Inventory control


  Process that ensures that the business has sufficient but not too much stock
• Job design


  The way which tasks are combined to form a job
• Just-in-time


  Method when inventory arrives just when it's needed
• Labour productivity

  Output produced per employee over a given time
• Lean production


  Methods of production where a business can reduce waste
• Limited liability

  Owners are only liable for the money they have invested
• Margin of safety

  Difference between actual level of output and break even
• Market capitalisation


  Margin of outstanding shares in a plc
• Market growth

  The percentage growth of a market over a period of time
• Market research

  planning, collecting and analysing data to make a market decision
• Market segmentation

  dividing a market into smaller segments according to e.g. needs so that a business can target specific customers.
• Market share

  a share of the total market that is owned by a particular business, product or brand