Business Activity
Owners are personally responsible for all business debts.
What is Unlimited Liability?
Trade between countries without tariffs or restrictions.
What is Free Trade?
A feature that makes a business’s product or service better than its rivals.
What is a Competitive Advantage?
A contract where no set hours are guaranteed.
What is a Zero-Hours Contract?
Revenue – Total costs
What is the formula for Profit?
The number of customers who pass by a location.
What is Footfall?
The rate at which average prices in the economy are rising.
What is Inflation?
The process of obtaining goods and services from suppliers.
What is Procurement?
When a job no longer exists and the employee is dismissed as a result.
What is Redundancy?
Fixed costs ÷ (Selling price – Variable cost per unit)
What is the formula for Break-even point?
Operating without harming future generations or the environment.
What is Sustainability?
Gives consumers rights when buying goods or services (e.g., right to refund, repair, or replacement).
Consumer Rights Act (2015)
Splitting work into separate tasks to improve efficiency.
What is Division of Labour?
Non-financial rewards (e.g., company car, health insurance).
What are Fringe Benefits?
(Average annual profit ÷ Cost of investment) × 100
What is the formula for Average rate of return (ARR)?
Cost, labour, market proximity, competition, infrastructure, government incentives are factors affecting this?
What is Location?
Preparing plans to deal with unexpected events.
What is a Contingency Plan?
Comparing business performance or standards with the best in the industry.
What is Benchmarking?
Percentage of staff leaving the business within a given time period.
What is the Labour Turnover Rate?
(Net profit ÷ Revenue) × 100
What is the formula for Net Profit Margin?
Transport, communication, and services that support business activity.
What is Infrastructure?
When a business considers its wider impact on society and the environment.
What is Corporate Social Responsibility?
Shortening the time from order to delivery.
What is Lead Time Reduction?
The leader gives employees freedom to make decisions.
What is Laissez-faire Leadership?
Actual sales – Break-even sales
What is the formula for Margin of Safety?