BTEC - Key concepts

Cash inflow =

• Money paid out by the business to fund its operations or investment activities.

• The amount that remains in the account at the end of an accounting period.

• The rivalry between businesses looking to sell their goods/services in the same market.

• Money received by the business from its operations or investments.

Cash outflow =

• Money paid out by the business to fund its operations or investment activities.

• Money that the business has in cash or at the bank.

• The point at which the business’ total sales equals the total costs.

• Money received by the business from its operations or investments.

Break even point =

• The average profit for the year as a percentage of the original investment.

• The point at which the business’ total sales equals the total costs.

• Something the business owns; it has a value.

• The money spent by a business on goods and services.

Customer loyalty =

• Allocating a task to someone who would not normally be responsible for it.

• The quantity of a particular product that will be bought at particular price over a specific time.

• The likelihood that past customers will continue to buy from the business.

• Business transactions carried out electronically on the internet.

Exchange rates =

• The price of one currency based on another or the cost of buying one currency from another, for example £1 = $1.21

• Good/service sold to a customer in another country.

• The costs that stay largely the same, regardless of the business’ output.

• Items that are produced from raw materials for sale to businesses or consumers.

Fixed costs =

• The growth of a business by joining with another by merger or takeover.

• Good/service sold to a customer in another country.

• The costs that stay largely the same, regardless of the business’ output.

• A summary of the revenue and expenses over an accounting period that lead to a profit or loss position.

Interest rates =

• Where expenditure is greater than income.

• The extent of the owner’s/owners’ responsibility for the debts of the business.

• The amount by which current sales exceed the break-even level of output.

• The rate charged for borrowing money over a period of time, or the reward for saving money.

Loss =

• The site of a business and the reasoning behind the choice of site.

• A method of borrowing to purchase property, using the property as security.

• Where expenditure is greater than income.

• The cost of making one choice concerning the use of limited resources at the expense of an alternative choice.

Product portfolio =

• A business’ ability to make maximum profit with low operating expenses.

• A scheme that pays employees an additional amount based on the year’s profits.

• The range of products offered by one producer.

• Getting the money to pay for starting the business or for developing it.

Revenue =

• The income generated from the sale of goods/services.

• The possibility that the return on investment will be lower than expected.

• When the raw materials that are available are not sufficient to meet needs.

• Those people who own shares in a limited company; each shareholder is a part owner of the business.