Section 6

GDP is the dollar value of goods and services produced in a an economy over a period of year

Recession is period of falling gdp

Inflation is persistent rise in general price level of a country

Unemployment people who are able and willing to work are left without jobs or cannot find jobs

Economic growth is rise in level of real gdp, more output is produced in an economy

Balance of payment is the difference between imports and exports of an economy

Real income is the value of income it falls when price rise faster than money income

Export are good sold out by a country

Import are good bought in by country from another country

Exchange rate is value of currency expressed in terms of another currency

ER Depreciation is the fall in the value of currency compared to the value of another currency

ER appreciation is the rise in the value of currency compared to the value of another currency

Fiscal policy is change in tax and govt spending

Direct taxes are taxes levied on income and profit

Indirect taxes are taxes levied on goods and services taxpayer pay these tax when they buy good and services

Disposable income is income left to a person after tax has been deducted

Import tariff are tax on imported goods

Import quota is the physical limit on the quantity of goods that can be imported

Monetary policy change in interest rate and money supply by govt of central bank

Supply side policies are policies to make economy effiecient, they increase competitiveness of industries against those
from other countries.

Social responsibility when decision of business benfit stakeholders other than shareholder

Environment is our natural world clean water pure air

Global warming gradual increase in overall temperature of earth atmosphere caused by carbon dioxide and other
pollutants

Pressure group are groups of people that try to influence business decision by taking action

Private cost cost paid for or by producer and consumer

Private benefit gains to consumer and producer

External cost cost paid by society other than producer and consumer

External benefit gains to society

Social coost and benefit sum of private and external benefit and sum of private cost and external cost
Sustainable development is development that does not put at risk living standards of future generation

Consumer boycott is when consumer stops buying the product that does not work in ethical way

Ethical decision is doing the right thing

Globalization freer movement of people and capital between countries

Free trade agreement no barriers such as import quotas or tariff

Protectionism when govt protect domestic business from foreign competition

Multinational business production factories or services operation in more than country

SECTION 5
START UP CAPITAL – finance needed by new business to buy essential assets before it can began trading

WORKING CAPITAL- finance needed by business for day to day expenses

CAPITAL EXPENDITURE- money spent on nca which will last for more than a year

REVENUE EXPENDITURE – money spent on day to day expense

INTERNAL FINANCE obtained from within a business

EXTERNAL FINANCE- obtained from sources outside or separate from business

MICRO FINANCING- providing financial services including small loans to poor people not served by traditional banks

CROWDFUNDING- funding a project or venture by raising money from large number of people who contribute relatively
small amount typically through internet

CASH FLOW- inflows and outflows over a period of time

CASH INFLOWS- sum of money received

CASH OUTFLOW – sum of money spent during a period of time

CASH FLOW CYCLE- stages between paying out cash to receiving cash

PROFIT- surplus after total cost have been subtracted

CASH FLOW FORECAST- Expected inflows and outflows of the business, usually month to month, this then shows the
expected cash balance at the end of each year

NET CASH FLOW – difference between inflow and outflow of business

CLOSING CASH / BANK BALANCE – amount of cash held by business at the end of each month this then becomes
opening balance at start of next month

OPENING CASH/BANK BALANCE – amount of cash held by business a start of each year

WORKING CAPITAL – current asset – current liabilities ( capital available to a business to pay for day to day expenses)

ACCOUNTS- financial records of firms transaction

ACCOUNTANTS – are professionally qualified people who have responsibility for keep accounts and producing final
account

FINAL ACCOUNT- are produced at the end of each financial year tells about profit and loss of the business and its worth
INCOME STATEMENTS – records all income and the expenses incurred to earn that income at the end of each financial
year also called profit and loss account

REVENUE – income of business through sales of goods and servies over a period of time, quantity sold multiply price

COST OF SALES- are cost of producing or buying the goods actually sold by business at a time period

GROSS PROFIT – revenue is greater than cost of sales

TRADING ACCOUNT – how gp is calculated

NET PROFIT – profit made by business after all costs have been deducted by the business, calculated by subtracting
overhead cost from gp

DEPRECIATION – is an estimated fall in the value of nca over its useful life/ period of time

RETAINED PROFIT – net profit reinvested back in to the company after tax and dividends have been paid

SOFP – shows value of business asset and liabilities at the end of each year

ASSETS- resources owned by business or owed to a business either current of non current

LIABILITIES – resources owed by a business either current or non current

CAPITAL EMPLOYED – NCL + equity it is the permanent and long term capital invested in business

LIQUIDITY - abilty of business to pay back its short term debt

PROFITABILTY – measurement of the profit made either by value of sales or capital invested

ILLIQUID – assets are not easily convertible into cash

SECTION 4
FIXED COST – cost that does not vary with the level of output and have to be paid whether or not sales have been made

VARIABLE COST – vary directly with the level of output with no of items sold or produced

TOTAL COST – sum of fixed and variable

AVERAGE COST PER UNIT – total cost divided by total output

ECONOMIES OF SCALE – are factor that leads to reduction in average cost as business grows in size

DISECONOMIES OF SCALE- are factors that leads to increase in average cost as business grows in size

BREAK EVEN LEVEL OF OUTPUT – quantity that must be produced or sold for business to equal its total cost to total
revenue

BREAK EVEN CHARTS- graphs which show how costs and revenues of a business changes with sales, show level of sales
business must make to break even

BREAK EVEN POINT – level of sales where tc = tr

MARGIN OF SAFETY – amount by which sales exceed break even point

CONTRIBUTION – selling price less variable cost

PRODUCTIVITY – outputs measured against inputs used to create it

BUFFER INVENTORY – level of inventory held to deal with uncertainty in customer demand and deliveries of supplies
LEAN PRODUCTION – term for techniques used by business to reduce waste and increase efficiency

KAIZEN continuous improvement through elimination of waste

JIT JUST IN TIME – production method which involves reducing or virtually eliminating need to hold inventory of raw
materials or unsold inventories of finished goods

JOB PRODUCTION – where single product is made at a time

BATCH PRODUCTION – where quantity of one good is produced and then quantity of another good is produced

FLOW PRODUCTION – where large quantity of standardized products are produced in continuous process

QUALITY – good or service which meets customers demand / expectation

QUALITY CONTROL – checking for quality at the end of production process, it uses quality inspector as a way of finding
any faults

QUALITY ASSURANCE – checking for quality standards throughout the production process by employees

TQM TOTAL QUALITY MANAGEMENT – continuous improvement of product and processes by focusing on quality of
each and every stage of production

SECTION 3

MARKETING – Is process of identifying customer’s wants and satisfying them profitably

CUSTOMER – a person or business which buys goods or services from business

CUATOMER LOYALTY – when existing customer continually buy product from same brand

CUSTOMER RELATIONSHIP – communicating with customers to encourage them to become loyal to business and its
product

MARKET SHARE - is proportion of total market sales held by one business

CONSUMER – buys goods or services with purpose of using It not to re sell it

MASS MARKET – where there is large number of sales of a product

NICHE MARKET – is usually specialized, small segment of a much larger market

MARKET SEGMENT – is an identifiable subgroup of a whole market which shares same characteristics

MARKET RESEARCH - is a process of gathering analyzing, interpreting information about a market

PRODUCT ORIENTATED – business whose main focus of activity is the product itself

MARKET ORIENTATED – business who carries out research to find out customers wants before developing a product

MARKETING BUDGET – financial plan for marketing of a product or product ranges for a specified period of time, it
specifies how much money is available so that marketing department knows how much to spend

PRIMARY RESEARCH – is collection and coalition of original data via direct contact with potential or existing customers

SECONDARY RESEARCH – uses information that has been already collected and is available for use

QUESTIONNARIE – set of question to be answered as a means of collecting data for market research

FOCUS GROUP – representative of target market

ONLINE SURVEY – requires target sample to answer series of question via internet
INTERVIEWS – involves asking series of question often face to face or via calls

SAMPLE – group of people who are selected to respond to a market research exercise

RANDOM SAMPLE – people selected at random, for research

QUOTA SAMPLE – people selected on basis of similar characteristics

MARKETING MIX – terms which describes activities involved in marketing of product or service , often summarized as
four ps

USP – unique selling point special feature of a product that differentiate it from competitor

BRAND NAME – unique name of a product that distinguishes from competitors

BRAND LOYALTY – when customers keep buying the same brand again and again instead of buying competitors

BRAND IMAGE – image or identity given to a product that gives it a personality of its own and distinguishes from
competitors

PACKAGING – wrapping or physical container, also used for promotion or selling appeal

PRODUCT LIFE CYCLE – describe the stages a product moves from development to its decline

EXTENSION STARATEGY – way of keeping a product at its maturity stage of life cycle and extending the cycle

COST PLUS PRICING – cost of manufacturing the product plus profit mark up

COMPETITIVE PRICING – when product is priced in line or just below competitor’s product to try to capture more of the
market

PENETRATION PRICING – price is set lower then competitor’s price in order to be able to enter new market

PRICE SKIMMING – when price is set higher for the new product

PROMOTIONAL PRICING – product sold at very low price for short period

DYNAMIC PRICING – change of product price depending on level of demand usually online

PRICE ELASTIC DEMAND – responsive of demand to change in price consumers are sensitive to change in price

INELASTIC – consumer are insensitive to change in price

DISTRIBUTION CHANNEL – Means by which product is passed from production place to customers

AGENT – independent person or business appointed to deal with sales and distribution of the product

PROMOTION – Where marketing strategy aims to raise customer awareness of the product generating sales and helping
create loyalty

ADVERTISING – communication with customers to encourage them to buy it

INFORMATIVE – emphasis of advertising is to give full information of the product

PERSUASIVE – where advertising is trying to persuade the customer that they really need the product and should buy it

TARGET AUDIENCE – refer to potential buyers

SALES PROMOTION – incentives aimed at customer to increase short term sales

VIRAL MARKETING – when customers are encouraged to share the information online about the product

E – COMMERCE – online buying and selling of goods and services, using computer systems linked to net and apps on
phone

MARKETING STRATEGY – plan to combine right combination of 4 ps to achieve particular marketing objectives

SECTION 2
MOTIVATION – reason why people work hard and effectively for the business’

BONUS – payment above basic pay for good work

COMMISSION –payment related to number of sales made

PROFIT SHARING- System whereby proportion of company profit is paid out to employees

JOB SATSIFACTION – enjoyment derived from feeling that you have done a good job

JOB ROTATION – involves worker swapping around doing each specific task for limited time and then swapping back

ENRICHMENT – involves looking at job and adding task that require more skill or responsibilities

PROMOTION – advancement of an employee in an organization

ORGANISATIONAL STRUCTURE – refers to level of management and division of responsibilities within an organization

ORGANISATIONAL CHART – refers to diagram that out line management structure

HIERARCHY – refers to level of mangerment from highest to lowest

CHAIN OF COMMAND – structure in an organization which allowes instruction to be passed down senior management to
lower levels

SPAN OF CONTROL – number of subordinates working directly under manager

DIRECTORS – SENIOR MANAGER WHO LEAD PARTICULAR DEPARTMENT

LINE MANAGER – HAVE DIRECT RESPONSIBILTY OF PEOPLE BELOW THEM

SUPPERVISOR – JUNIOR MANAGERS WHO HAVE DIRECT CONTROL PVER EMPLOYEES

STAFF MANAGAER- SPECIALIST WHO PROVIDE SUPPORT INFORMATION AND ASSITANCE TO LINE MANAGER

DELEGATION – giving subordinate authority to perform particular task

LEADERSHIP STYLES – different approaches to dealing with people and making decision when in position of authority

AUTOCRATIC – manager expect to be incharge and have his orders followed

DEMOCRATIC - employee involment in decision making

LAISSEZ FAIRE – making broad objectives clear

CLOSED SHOP – employee must be part of same trade union

TRADE UNION – group of employees joined together to ensrue their rights are protected
RECRUITMENT – process of identifying that business needs to employee someone up to the point applications have
arrived at the business

SELECTION – evaluating candidates for specific job and selecting an individual for employment on basis of needs of
business

JOB ANALYSIS – responsibilities and task related to jobs are identified

DESCRIPTION – outline duties to be carried out

SPECIFICATION – document which outline specification, qualification, expertise, characteristics for job

WORKFORCE PLANNING - establishing worker and skills needed for foreseeable future of business

DISMISSAL – employee is let go because of their work being unsatisfactory

REDUNDANCY – employee no longer needed not because their work was unsatisfactory

CONTRACT OF EMPLOYMENT – legal agreement between employee and employer listing rights and responsibilities

INDUSTRIAL TRIBUNAL – type of law court that makes judgments on disagreement between employees and companies

ETHICAL DECISION – decision taken by company because of moral code observed by firm