Acquisition The purchase of the
whole or part of a business by
another business.
Activity-based costing (ABC)
A method of business accounting
that analyzes overhead costs to
determine which activities create
which costs. This results in a more
accurate analysis of costs than
traditional cost accounting, which
measures direct costs and then adds
an estimate of overheads.
Asset Any economic resource
that is owned by a company that
can be used to generate value for
the business.
Balance sheet A summary of a
company’s financial value,
incorporating its assets, liabilities,
and equity of the owners, which
is usually published at the end
of its financial year.
Bankruptcy A legal declaration
that an individual or a company
is insolvent, meaning that they
cannot repay their debts.
Benchmarking A method of
evaluating a company by comparing
its perfomance and practices with
those of the market-leading
business or businesses.
Board In business, a term that refers
to the board of directors of a
company or organization. Board
members are either elected or
appointed to oversee the company’s
activities and performance.
Brand The perceived “identity”
of a company or product that
distinguishes it from the
competition. This can include
many things, from name, design,
logo, and packaging to broader,
external affiliations that may set
it apart from its rivals (such as
ethical trading standards and
production initiatives).BRIC economies An acronym
for the four emerging economies of
Brazil, Russia, India, and China.
They are considered by some to
pose a challenge to Western
economic supremacy.Budget A financial plan that lists all
planned expenses and incomes of
business unit, project, or venture.Bull market A financial term
describing a period in which share
values increase, leading to optimism
and economic growth.Buy out Taking control of a company
by purchasing a controlling interest
of its stock.Capital The money and physical
assets (such as machinery and
infrastructure) used by a company to
produce an income.Cartel A group of businesses that
agrees to cooperate in such a way
that the output of their goods or
services is restricted, and prices are
driven up.Cash flow The incomings and
outgoings of cash in a business,
representing its operating activities.CEO An acronym for Chief Executive
Officer, the highest executive in a
company. Appointed by and
reporting to the board.Closed innovation The idea,
popular in the 20th century, that
innovation in a company should take
place strictly within its own walls, by
its own employees, rather than
drawing on knowledge, ideas, and
expertise from outside.Collusion An agreement between
two or more companies not to
compete, so that they can fix prices.Commodity A term for any item,
product, or service that can be freely
bought, sold, and traded.Comparative advantage The
ability to produce goods or services
at a lower opportunity cost than rivals.Competitive advantage A strategy
whereby companies position
themselves ahead of competitors
either by charging less or by
differentiating their services or
products from those of their rivals.Conglomerate A corporation that
is made up of two or more businesses
that may operate across different
fields and sectors.Corporation An independent legal
entity, owned by shareholders, that
is authorized to conduct business.
Corporations exist separately and
apart from their employees and
shareholders and have their own
rights and liabilities: they can
borrow money, own assets, and sue
or be sued.Cost accounting A method of
business accounting that aims to
determine costs by measuring direct
costs and then adding an estimate
of overheads.GLOSSARY
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