Notesale: Turn your study into money

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Theme 2

Acid test ratio

Liquidity

Similar to the current ratio but excludes
stocks from current assets
...


The ease with which assets can be
converted into cash
...


Amortisation

Long-term finance

The writing off of an intangible asset,

Money borrowed for more than one year
...


The range of output between the breakeven level and the current level of output,
over which a profit is made
...


Theme 2

Assets

Monetary policy

Resources that belong to a business
...


Average cost or unit cost

National minimum wage

Calculated by dividing the total cost by the
output
...


Barriers to entry

Net assets

Factors which make it difficult or impossible
for businesses to enter a market and
compete with existing producers
...


Base rate

Non-current assets

The rate of interest around which a bank
ncy structures other interest rates
...

Batch production

Long-term resources that will be used by
the business repeatedly over a period of
time
...


Money owed by the business for more than
one year, sometimes called long-term
liabilities
...


The difference between gross profit and
business overheads, such as selling and
administrative expenses
...


Break-even chart

Outsourcing

A graph containing the total cost and total
revenue lines, illustrating the break-even
output
...


Break-even output

Overtrading

The output a business needs to produce so
The situation where a business does not
that its total revenue and total costs are the have enough cash to support its production
same
...

Break-even point

Peer-to-peer lending (P2PL)

The point at which total revenue and total
costs are the same
...


Budget

Permanent capital

A quantitative economic plan prepared and
agreed in advance
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Theme 2

Budgetary control

Production

A business system that involves making
future plans, comparing the actual results
with the planned results and then
investigating the causes of any differences
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Buffer stocks

Production cost budget

Stocks held as a precaution to cope with
unforeseen demand
...


Capital

Productivity

Money put into the business by the owners
...


Capital

Profit

The money provided by the owners in a
business
...
It can be negative
...


Net profit after tax, expressed as a
percentage of revenue/ turnover
...


The difference between operating profit
and interest and exceptional items
...
g
...


Features of a product that allow it to satisfy
customers' needs
...


Cartel

Quality assurance

A group of businesses (or countries) which
join together to agree on pricing and output
in a market in an attempt to gain higher
profits at the expense of customers
...
It often involves
guaranteeing that quality standards are
met
...


When employees form a series of links
between customers and suppliers in
business, both internally and externally
...


Groups of workers meeting regularly to
solve problems and discuss work issues
...


Making sure that the quality of a product
meets specified quality performance
criteria
...


A less severe form of depression
...


A period where economic growth begins to
increase again after a recession
...


The level of current stock when new orders
are placed
...
The money contributes towards
fixed costs and profit
...


Cost of sales

Retained profit

The direct costs of a business
...


Current assets

Revenue expenditure

Liquid assets, i
...
those assets that will be
converted into cash within one year
...


Current liabilities

Revenue or turnover

Money owed by the business that must be
repaid within one year
...


Theme 2

Current ratio

Rights issue

Assesses whether or not a business has
enough resources to meet any debts that
arise in the next 12 months
...


Issuing new shares to existing shareholders
at a discount
...
Also used to
describe a situation where economic
growth is falling or negative when inflation
is falling
...


Depreciation (of a currency)

Sales budget

A fall in the value of a currency
...


Discrimination

Sales revenue

Favouring one person over another
...


The value of output sold in a particular time
period
...


Division of labour

Sales volume

Specialisation in specific tasks or skills by an
individual
...


Downsizing

Secured loans

The process of reducing capacity, usually by
laying off staff
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Theme 2

Downturn

Semi-variable cost

A period in the economic cycle where GDP
grows, but more slowly
...


Economic, trade or business cycle

Share capital

Regular fluctuations in the level of output in
the economy
...


Effciency

Shareholders' equity

Producing a level of output where average
cost is minimised
...


Employment tribunal

Short run

A court that deals with cases involving
disputes between employers and
employees
...


Exceptional costs

Short-term borrowing

A one-off cost, such as a large bad debt
...


Exchange rate

Slump or depression

The price of one currency in terms of
another
...


Theme 2

External factors

Specialisation

Factors beyond the control of businesses
cause it to collapse
...


Fiscal policy

Standardisation

Using changes in taxation and government
expenditure to manage the economy
...


A financial document showing a company's
income and expenditure over a particular
time period, usually one year
...


A summary at a particular point in time of
the value of a firm's assets, liabilities and
capital
...


The collection of data about the
performance of a particular process in a
business
...


The flow of stock into and out of storage
...


The charges made by government on the
activities, earnings and income of
businesses and individuals
...


The entire cost of producing a given level of
output
...


A managerial approach that focuses on
quality and aims to improve the
effectiveness, flexibility and
competitiveness of the business
...

from selling output
...


Money owed by the business to suppliers
and utilities, for example
...


Inflation

Trade and other receivables

A general rise in prices
...


Theme 2

Intangible assets

Undercapitalised

Non-physical assets, such as brand names,
patents and customer lists
...


Internal factors

Unfair dismissal 2 -

Factors that businesses are able to control
cause it to collapse
...


Internal finance

Unincorporated businesses

Money generated by the business or its
current owners
...


Inventories

Unlimited liability

Stocks, such as raw materials and finished
goods held by a business
...


Where the lender has no protection if the
borrower fails to repay the money owed
...


A cost that rises as output rises
...


The difference between actual financial
outcomes and those budgeted
...


The process of calculating variances and
attempting to identify their causes
...
g
...


Venture capitalism
Providers of funds for small or mediumsized companies that may be considered
too risky for other investors
...


The funds left over to meet day-to-day
expenses after current debts have been
paid
...


Lean production

Work-in-progress

An approach to operations that focuses on
the reduction of resource use
...


Lease

Zero-based budgeting or zero budgeting

A contract to acquire the use of resources
such as property or equipment
...


Theme 2

Liabilities
Money owed by the business to banks and
suppliers, for example
...




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