Page 364 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Glossary

Glossary

Absenteeism worker’s non-attendance at work without good Business plan a detailed written document outlining the

reason. purpose and aims of a business which is often used to

Acid test ratio ratio between liquid assets and current liabilities. persuade lenders or investors to finance a business proposal.

Adding value selling a product for more than it cost to Business start-up a newly formed business. They usually start
produce it. small, but some might grow to become much bigger.
Advertising paid-for communication with consumers which Capital expenditure spending by a business on non-current

uses printed and visual media. The aim is to inform and assets such as machinery or buildings.
persuade consumers to buy a product. Capital goods physical goods used by other businesses to help
Annual General Meeting (AGM) a meeting for shareholders produce other goods and services such as machinery and
that limited companies must hold once every year. delivery vehicles.
Appreciation a currency is said to appreciate if the value of the Capital intensive production process using a high quantity of
currency increases with respect to another currency. capital equipment compared with labour input.

Appropriation account records the distribution of profi t aft er Capital productivity a measure of the efficiency of capital by
tax; usually dividends and retained profi t. calculating the output per capital employed.
Assets resources that are owned by a business. Cash-fl ow forecast an estimate of the future cash infl ows and
outflows of a business.

Autocratic leadership a leadership style where the leader makes
all the decisions. Centralised organisation one where all the important decision-

making power is held at Head Office, or the centre.

Average costs the cost of producing a single unit of output.
Chain of command the route through which authority is
Balance of payments the difference between the value of

passed down through an organisation.
export and import of goods and services of a country
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over a year. Chain of production the production and supply of goods to the
final consumer involves activities from primary, secondary

Balance sheet an accounting statement that records the
and tertiary sector businesses.
assets, liabilities and owner’s equity of a business at a
particular date. Channels of distribution how a product gets from the producer
to the fi nal consumer.
Bank loan provision of finance by a bank which the business

will repay with interest over an agreed period of time. Chief Executive Offi cer (CEO) the most senior manager responsible
for the overall performance and success of a company.
Barriers to trade usually taxes, quotas or bans that one country

places on the goods of other countries to prevent or increase Collateral non-current assets offered as security against
the cost of them entering that country. borrowing.

Batch production the production of goods in batches. Each Commission payment to sales staff based on the value of the
batch passes through one stage of production before moving items they sell.
on to the next stage. Communication media the methods used to communicate a
Below-the-line promotion promotion that is not message.
paid-for communication but uses incentives to encourage Competitive pricing setting a price similar to that of competitors’
consumers to buy. products which are already established in the market.

Bonus an additional reward paid to workers for achieving Consumer the final user of a product.
targets set by managers. Consumer goods products which are sold to the fi nal consumer.
Brand a name, image or symbol that distinguishes a product They can be seen and touched, for example computers and food.

from competitors’ products. Consumer markets markets for goods and services bought by
Brand image the general impression of a product held by the fi nal consumer.
consumers. Consumer services non-tangible products such as insurance
Break-even the level of output where revenue equals total costs; services, transport.
the business is making neither profit nor loss. Corporate social responsibility (CSR) businesses taking

Business activity the process of producing goods and services responsibility for the impact their activities might have on
to satisfy consumer demand. society and the environment.
Business environment the combination of internal and Cost-benefi t analysis analysis of the costs and benefits of a

external factors that influence the operations of a business. project, the focus being on the social costs and benefi ts.