Flashcards
Buss3 Key Terms Flashcards
Cards in this deck (32)
- 1AimsGeneral statements of what a business intends to achieve.
- 2ObjectiveDetails of what the business wants to achieve
- 3StrategyHow a business will achieve its goals
- 4Cost LeadershipA strategy that aims to be the lowest cost producer in an industry. Requires exploitation of economies of scale
- 5Economies of scaleCost advantages that a business can exploit as a result of expanding its scale of production. Economies of scale reduce the average cost of production
- 6Functional ObjectivesAims set for each functional area of a business; marketing, HR, finance, operations
- 7Mission StatementStatement of the overall purpose of the business
- 8Shareholder ValueWhere shareholders earn a return from their investment which is
- 9SMART ObjectivesObjectives are most likely to be achieved if they are Specific, Measurable, Achievable, Realistic and Timed
- 10SWOT AnalysisAssessment of the strengths and weaknesses of a business and the opportunities and threats that the business needs to consider
- 11TargetsSet to an individual or team as goals in which they are to achieve. These are usually time bound
- 12Acid-test RatioA liquidity ratio that looks at if a business can pay for current liabilities out of cash and near cash assets (ignores stock)
- 13Asset TurnoverShows how hard the organisation is working to turn assets into money. The higher the figure, the harder they're working. This is usually compared to previous years as there is no industry average
- 14LiquidityASK!
- 15AssetsAmounts owed to or owned by a business
- 16Average rate of returnASK!!
- 17Balance SheetThe financial statement that shows the assets and liabilities of a business
- 18Capital ExpenditureExpenditure on assets which are kept in the business (machinery, land) and not sold/turned into products
- 19Cash Flow TargetSpecific financial aims set by a business
- 20Corporation TaxThe tax paid by a business on their profits, typically 20-30%
- 21Cost minimisationStrategy of achieving the most cost effective way of delivering goods and services to the required level of quality
- 22Creditor DaysA ratio that estimates the amount of days it takes to pay back owed credit (to suppliers)
- 23Current RatioCompares current assets to current liabilities to give a current liquidity indication.
Ideal figure would be between 1.5:1 and 2:1 - 24Current assetStuff you own
- 25Current liabilitiesStuff you owe
- 26DebenturesA long term source of finance - form of loan issued by a company
- 27DepreciationAn estimate of the fall in value of a fixed asset over time
- 28Discount factorThe conversion of a projected cost or benefit in a future year to its present value
- 29DividendAmount paid to shareholders out of company profits
- 30Dividend yieldA measure of shareholder return - compares the dividend per share by the share price
- 31Fixed assetsAssets such as property, equipment and vehicles that are intended to be retained ans used for more than a year
- 32GearingA ratio that shows how much a business is funded by debt. A figure between 25-50% is good
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- A-Level Business (BUSS3) Flashcards on Buss3 Key Terms Flashcards, created by Laura Trythall on 14/01/2016.
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- Laura Trythall
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