TASC Business Studies Level 3 flashcards
TASC Business Studies Level 3 · Build recall with a focused review session.
31 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Primary sector
- The part of the economy that extracts or harvests raw materials directly from nature, including agriculture, fishing, forestry and mining. Output is sold onward for processing.
- Limited liability
- A legal protection meaning owners of an incorporated business can lose only the capital they invested, not their personal assets, if the business cannot pay its debts.
- Unlimited liability
- A legal position where the owner of an unincorporated business is personally responsible for all business debts and may have to sell personal assets to settle them.
- PESTLE analysis
- A framework that reviews Political, Economic, Social, Technological, Legal and Environmental influences on a business to identify opportunities and threats in its external environment.
- Market segmentation
- Dividing a total market into groups of customers with similar characteristics or needs, such as by age, income or location, so marketing can target each group specifically.
- Opportunity cost
- The value of the next best alternative given up when a choice is made, such as the income forgone when savings are used to fund a new venture.
- Stakeholder conflict
- A situation where different stakeholder groups want incompatible outcomes, for example shareholders seeking higher dividends while employees seek higher wages from the same profit.
- Social enterprise
- A business that trades to generate income but directs its surplus toward a social or environmental mission rather than maximising returns for owners.
- Marketing mix
- The combination of product, price, place and promotion decisions used to position an offer in its target market; service firms also manage people, process and physical evidence.
- Price elasticity of demand
- The responsiveness of quantity demanded to a change in price, calculated as percentage change in quantity demanded divided by percentage change in price.
- Break-even output
- The number of units that must be sold for total revenue to equal total costs, calculated as fixed costs divided by contribution per unit.
- Margin of safety
- The gap between the actual or planned level of sales and the break-even level, showing how far sales can fall before the business makes a loss.
- Market share
- The proportion of total market sales captured by one business, calculated as the firm's sales divided by total market sales, multiplied by one hundred.
- Product life cycle
- The pattern of sales over a product's life through development, introduction, growth, maturity and decline, guiding decisions on extension strategies and replacement products.
- Capacity utilisation
- The percentage of a firm's maximum possible output that is actually produced, calculated as actual output divided by maximum output, multiplied by one hundred.
- Quality assurance
- An approach that builds agreed quality standards into every stage of production and checks processes continuously, rather than inspecting and rejecting finished goods afterwards.
- Cash flow forecast
- A projection of expected cash inflows and outflows over future periods, showing net cash flow and the closing balance to reveal any predicted cash shortfall.
- Gross profit
- Revenue minus the cost of sales, showing the profit earned from trading before operating expenses, interest and tax are deducted.
- Net profit margin
- Net profit expressed as a percentage of revenue, calculated as net profit divided by revenue multiplied by one hundred, showing how much of each sale becomes profit.
- Return on capital employed
- Operating profit divided by capital employed, expressed as a percentage, measuring how efficiently the money invested in the business generates profit.
- Contribution per unit
- Selling price per unit minus variable cost per unit; the amount each sale contributes toward covering fixed costs and then generating profit.
- Payback period
- The length of time needed for cumulative net cash inflows from a project to equal the initial investment, expressed in years or months.
- Average rate of return
- Average annual net return from an investment divided by the initial outlay, expressed as a percentage, used to compare the profitability of competing projects.
- Working capital
- The money available for day-to-day operations, calculated as current assets minus current liabilities, covering stock, debtors and short-term obligations.
- Business plan
- A written document setting out the business idea, objectives, market research, marketing and operations plans, management team and financial forecasts, often used to raise finance.
- SMART objective
- A target that is specific, measurable, achievable, relevant and time-bound, allowing progress to be monitored and performance judged against a clear standard.
- Span of control
- The number of employees directly answerable to one manager; a wide span produces a flatter structure, while a narrow span creates more management layers.
- Autocratic leadership
- A style in which the leader makes decisions alone and expects compliance, giving fast decisions in a crisis but limited staff input or motivation.
- Herzberg's two factors
- The theory that hygiene factors such as pay and conditions prevent dissatisfaction, while motivators such as achievement and responsibility create genuine job satisfaction.
- Variance analysis
- Comparing budgeted figures with actual results to identify and explain differences, then taking corrective action where performance falls short of plan.
- Delegation
- Assigning authority and responsibility for a task to a subordinate while retaining overall accountability, which develops staff and frees managers for higher-level work.