business school key terms

• Accountant


  A professionally qualified person who has responsibility for keeping accurate accounts and for producing the final accounts
• Accounts


  The financial records of a firm's transactions
• Acquisition


  See take-over
• Added value


  The difference between the selling price of a product or service and the cost of inputs such as materials and components
• Agent


  An independent person or business that is appointed to deal with the sales and distribution of a product or range of products
• AIDA model


  A simple way of planning an advert's design: it stands for attention, interest, desire, action
• Annual general meeting (AGM)


  A legal requirement for all companies; all shareholders may attend. They vote on who they want to be on the board of directors for the coming year and on other issues raised by the board or themselves
• Application form


  A form completed by an applicant for a job vacancy which summarises the applicant's name, address, education, qualifications, previous experience
• Appraisal


  Method of assessing the effectiveness of an employee, usually involving an interview with a senior member of staff
• Appreciation of a currency


  When the value of a currency rises and it can buy more of another currency than before
• Appropriation account


  The part of the profit and loss account which shows how the profit after tax is distributed – either as dividends or kept in the company as retained profits
• Arbitrator


  A person who listens to both sides in an industrial dispute (trade union and management) and then gives a ruling on what the arbitrator thinks is fair to both sides
• Assets


  The items of value which are owned by the business, e.g. land, buildings, equipment and vehicles
• Autocratic leadership


  Instructions and strategies are issued from above with little opportunity for contributions to decision-making from less senior employees
• Average cost per unit


  The total cost of production divided by total output
• Balance of payments


  The record of the difference between a country's exports and imports
• Balance sheet


  Shows the value of a firm's assets and liabilities at a particular time
• Batch production


  Products are made in batches of a certain quantity, usually as orders come in
• Best fit


  See line of best fit
• Bonus


  An additional amount of payment above normal pay as a reward for good work
• Brand image


  Where a product is given an image or identity to distinguish it from its competitors' brands
• Brand loyalty


  When consumers keep buying the same brand again and again instead of choosing a competitor's brand
• Brand name


  The unique name of a product that distinguishes it from other brands
• Break-even charts


  Graphs showing how costs and revenues of a business change with sales; they show the level of sales the business must make in order to break even
• Break-even point


  The level of sales at which total costs equal total revenue
• Budgets


  Plans for the future containing numerical or financial targets
• Buffer stock


  The minimum level of stock that a business plans to hold
• Bulk decreasing


  A good which decreases in size or weight during the manufacturing process, e.g. steel production where there is a lot of waste from the raw materials, therefore the manufacture of steel tends to be located near to the raw materials
• Bulk increasing


  A good which increases in size or weight during the manufacturing process, e.g. when Coca-Cola is produced, the raw materials weigh less than the finished product after all the ingredients have been mixed together and water added. The finished product will therefore cost more to transport to the market than the raw materials cost to transport to the factory for manufacture and the factory will tend to be located near to the market
• Business decisions


  These include strategic decisions (very important ones which can affect the overall success of the business), tactical decisions (those which are taken more frequently and which are less important) and operational decisions (day-to-day decisions which will be taken by lower-level managers)
• Business ethics


  A set of standards or rules that prevent a business acting in an unfair or dangerous way towards their workers or others
• Capital


  The money invested into a business by the owners
• Capital employed


  Long-term finance invested in a business – loans plus shareholders' funds
• Capital expenditure


  Money spent on fixed assets which will last for more than one year
• Cash flow


  The cash in-flows and out-flows over a period of time
• Cash-flow cycle


  A means of showing the stages between paying out cash for labour, materials, etc. and receiving cash from the sale of goods
• Cash-flow forecast


  An estimate of future cash in-flows and out-flows of a business, usually on a monthly basis
• Cash in-flows


  The sums of money received by a business during a period of time
• Cash out-flows


  The sums of money paid out by a business during a period of time
• Centralised


  A management structure in which most decisions are taken at the centre, or at higher levels of management