PSEB SS Business Studies key terms

A business owned and run by one person, who keeps all profits but carries unlimited personal liability for the debts and obligations of the business.

A business owned by two or more people who share capital, profits, and decision-making under an agreed deed, usually with unlimited liability unless a limited partner is involved.

A business registered as a separate legal entity from its owners, so shareholders' liability is normally capped at the amount they invested in shares.

The principle that an owner's financial risk is restricted to the money already invested, protecting personal assets from business debts if the firm fails.

A situation where owners are personally responsible for all business debts, meaning personal property may be sold to settle claims against the firm.

Money raised by a company when it issues shares to investors, who then become part-owners and may receive dividends from profits.

A portion of a company's profit paid to shareholders, usually as an amount per share, decided by the directors and approved by owners.

Profit kept inside the business instead of being distributed to owners, providing an internal source of finance for future investment or working capital.

The level of sales at which total revenue exactly equals total costs, so the business makes neither a profit nor a loss on its operations.

A cost that does not change with the number of units produced or sold in the short term, such as rent, insurance, or salaried management.

A cost that rises or falls directly with output or sales volume, for example raw materials, packaging, or piece-rate wages paid per unit.

The amount left from selling one unit after subtracting its variable cost, which goes towards covering fixed costs and then generating profit.

The movement of money into and out of a business over a period, showing whether enough liquid funds exist to pay bills as they fall due.

The money available for day-to-day operations, calculated as current assets minus current liabilities, covering stock, debtors, and short-term expenses.

The ease with which an asset can be converted into cash without significant loss of value, and a firm's ability to meet short-term obligations.

A financial statement listing assets, liabilities, and owners' equity at a specific date, showing what the business owns, owes, and is worth.

Any resource of value owned or controlled by a business that is expected to bring future benefit, such as cash, machinery, buildings, or stock.

A debt or obligation a business owes to an outside party, such as a bank loan, unpaid supplier invoice, or tax due, settled over time.

A financial report summarising revenue, costs, and profit or loss over a trading period, also called a profit and loss account.

Revenue from sales minus the direct cost of the goods sold, measuring the margin earned before overheads and other operating expenses are deducted.

The final profit after all expenses, including overheads, interest, and tax, have been deducted from revenue, often called the bottom line.

Dividing a broad market into smaller groups of buyers with similar needs or traits, so products and marketing can be tailored to each group.

The specific group of customers a business chooses to serve with its product or service, guiding design, pricing, and promotional decisions.

The combination of product, price, place, and promotion decisions a firm uses to meet the needs of its chosen target market.

The stages a product passes through from introduction and growth to maturity and decline, each requiring different marketing and pricing strategies.

Creating a distinct name, logo, or identity for a product so customers recognise it and associate it with particular qualities or values.

A measure of how strongly the quantity demanded responds to a change in price; demand is elastic when buyers react sharply to price changes.

The method a business uses to set prices, such as cost-plus, penetration, skimming, or competitive pricing, to achieve sales and profit goals.

The process of attracting and selecting suitable people to fill vacancies, from advertising a post to appointing the best candidate.

A document outlining the duties, responsibilities, and reporting lines of a post, used to attract applicants and set expectations for the role.

Planned activity to develop an employee's skills and knowledge, either on the job or off the job, improving performance and motivation.

The internal drive that makes employees work hard and stay committed, influenced by pay, recognition, working conditions, and job design.

Cost advantages gained as output grows, such as spreading fixed costs over more units or buying materials in bulk at lower prices.

Rising average costs that can occur when a business grows too large, caused by poor communication, slower decisions, and weaker coordination.

Any individual or group affected by a business's activities, such as owners, employees, customers, suppliers, lenders, and the local community.

A business's voluntary commitment to act ethically towards society and the environment, going beyond legal minimums in its operations and decisions.

A written document setting out a venture's aims, market analysis, strategies, and financial forecasts, used to guide the firm and attract finance.