LC Business flashcards
LC Business · Build recall with a focused review session.
33 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Business
- An organised commercial activity that produces or distributes goods and services to satisfy customer wants, aiming to earn revenue above costs.
- Primary sector
- Activities that extract raw materials directly from nature, such as farming, fishing, forestry, and mining, forming the first stage of production.
- Secondary sector
- Activities that convert raw materials into finished or intermediate goods through manufacturing, processing, and construction work.
- Tertiary sector
- Service activities such as retail, transport, banking, and tourism that support customers and other businesses rather than producing physical goods.
- Quaternary sector
- Knowledge-based activities including research, information technology, consultancy, and education that generate and apply specialised information.
- Sole trader
- A business owned and controlled by one person who keeps all profit but bears unlimited liability for debts and has no separate legal identity.
- Partnership
- A business owned by two or more people sharing capital, profits, and decisions under a partnership agreement, usually with unlimited liability unless a limited liability partnership is formed.
- Private limited company
- An incorporated business whose shares are sold privately, giving owners limited liability and a separate legal identity without listing on a stock exchange.
- Public limited company
- An incorporated business that may offer shares to the general public on a stock exchange, giving limited liability and greater access to capital but less owner control.
- Limited liability
- A legal protection limiting an owner's financial loss to the capital they invested, so personal assets are not used to settle business debts.
- Unlimited liability
- A position where owners are personally responsible for all business debts, so personal assets may be seized if the business cannot pay.
- Cooperative
- A business owned and democratically controlled by its members, who share profits according to agreed rules rather than by shareholding size.
- Stakeholder
- Any individual or group with an interest in a business's activities and outcomes, such as owners, employees, customers, suppliers, and the local community.
- Fixed costs
- Costs that do not change with the level of output in the short run, such as rent, insurance, and salaried management.
- Variable costs
- Costs that rise or fall directly with output, such as raw materials, packaging, and piece-rate labour.
- Break-even output
- The quantity at which total revenue equals total costs, calculated as fixed costs divided by contribution per unit.
- Contribution per unit
- Selling price per unit minus variable cost per unit; the amount each sale adds toward covering fixed costs and then profit.
- Margin of safety
- The difference between current or planned sales volume and break-even volume, showing how far sales can fall before a loss occurs.
- Gross profit
- Revenue minus cost of sales; it measures profit from trading before operating expenses such as administration and marketing are deducted.
- Net profit
- Gross profit minus operating expenses and interest; it shows the final profit earned after all routine costs are accounted for.
- Cash flow
- The movement of money into and out of a business over a period; positive net cash flow means receipts exceed payments.
- Working capital
- Current assets minus current liabilities; the short-term funds available to finance day-to-day operations.
- Liquidity
- A business's ability to meet short-term obligations as they fall due, depending on cash and assets that can be quickly converted.
- Cash flow forecast
- A projection of expected cash receipts and payments over future periods, used to anticipate shortfalls and plan borrowing.
- Economies of scale
- Falls in average cost per unit as output rises, arising from purchasing, technical, financial, or managerial advantages of larger scale.
- Diseconomies of scale
- Rises in average cost per unit beyond an optimal output level, usually caused by coordination, communication, and motivation problems in large organisations.
- Market segmentation
- Dividing a market into groups of buyers with similar characteristics or needs so that products and marketing can be targeted.
- Marketing mix
- The combination of product, price, place, and promotion decisions used to position an offer and meet target customer needs.
- Market research
- Systematic collection and analysis of data about customers, competitors, and markets to support business decisions.
- Business plan
- A written document setting out objectives, market analysis, operations, and financial forecasts, used to guide the business and attract finance.
- SWOT analysis
- A planning tool that assesses internal strengths and weaknesses alongside external opportunities and threats to inform strategy.
- Motivation
- The internal and external forces that drive employees to apply effort at work, influenced by pay, conditions, recognition, and job design.
- Recruitment
- The process of identifying a vacancy, attracting suitable applicants, and selecting the person best matched to the role.