Key Business Terminology


Key Business Terminology

Mission Statement- A written declaration of an organization's core purpose and focus that normally remains unchanged over time.

Ownership- the form of the business, for example a soletrader and whther it's for-proft or non-profit.

Internal Environment- the size, culture and resources of the business that affectsits objective.

External Environment- political, legal, economic, social, technological and environmental factors and competition that effects a businesses objectives.

Strategy-  A method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem.

Strategic Decisions- Chosen alternative that affects key factors which determine the success of an organization's strategy

Strategic Planning- A systematic process of envisioning a desired future, and translating this vision into broadly defined goals or objectives and a sequence of steps to achieve them. Coporate Objectives- A well defined and realistic goal set by a company that often influences its internal strategic decisions.

SWOT Analysis- Situation analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined

Internal Factors- Inner strengths and weaknesses that an organization exhibits. Internal factors can strongly affect how well a company meets its objectives, and they might be seen as strengths if they have a favorable impact on a business, but as weaknesses if they have a deleterious effect on the business.

External Factors- Outside influences that can impact a business. Various external factors can impact the ability of a business or investment to achieve its strategic goals and objectives. These external factors might include competition; social, legal and technological changes, and the economic and political environment.

Balance Sheets- A condensed statement that shows the financial position of a business on a specified date.

Assets-  Something valuable that a business owns, benefits from, or has use of, in generating income.

Non-Current assets- Asset that is not to be converted to cash within 12 months of the balance sheet date.

Current Assets- An asset such as receivables, inventory, work in process, or cash, that is constantly flowing in and out of an organization.

Non-Current Liabilites- Obligation that is not to required to be satisfied within 12 months of the balance sheet date. Also called long term liability.

Current Liabilities- Obligations such as deferred dividend, trade credit, and unpaid taxes, arising in the normal course of a business and due for payment within a year. Also called current debt.

Debts- A duty or obligation to pay money, deliver goods, or render service under an express or implied agreement.

Working Capital- A duty or obligation to pay money, deliver goods, or render service under an express or implied agreement.

Cash Flow-  Incomings and outgoings of cash, representing the operating activities of an organization.

Capital Expenditure- An amount spent to acquire or upgrade productive assets (such as buildings, machinery and equipment, vehicles) in order to increase the capacity or efficiency of a company for more than one accounting period. Also called capital spending.

Overtrading- Transacting more business than the firm's working capital


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