29 terms in 3.7
balance sheet
(Statement of Financial Position).
Analysing the existing internal position of a business to assess strengths and weaknesses: financial ratio analysis
competitive strategy
Approach to competing effectively.
Analysing the external environment to assess opportunities and threats: the competitive environment
Core Competencies
The unique combination of skills, capabilities, and resources that give a business a sustainable competitive advantage and are difficult for rivals to replicate.
current ratio
Liquidity measure comparing current assets to current liabilities.
economic growth
Increase in real GDP; expansion of economy.
Analysing the external environment to assess opportunities and threats: economic change
Efficiency Ratios
Financial ratios measuring how effectively a business manages its assets and liabilities: receivables days, payables days, and inventory turnover.
Elkington's Triple Bottom Line
A framework measuring business performance on three dimensions: Profit (financial), People (social), and Planet (environmental).
exchange rate
Price of one currency in terms of another.
financial ratio
Relationship between financial figures measuring performance/position.
fiscal policy
Government use of taxation and spending to influence economy.
free trade
International trade without barriers (tariffs, quotas, restrictions).
GDP
(Gross Domestic Product).
income statement
(Profit & Loss Account).
inflation
Sustained increase in general price level.
inventory turnover
How many times inventory is sold/replaced per period.
investment appraisal
A set of financial techniques used to evaluate whether a capital investment project is financially worthwhile, comparing...
Analysing strategic options: investment appraisal
Investment Appraisal (Strategic)
Financial techniques used to assess whether a capital investment project is financially worthwhile: Payback, ARR, and NPV.
legal environment
Laws and regulations affecting business operations.
Analysing the external environment to assess opportunities and threats: political and legal change
liquidity
Ability to meet short-term financial obligations; having cash/convertible assets available.
migration
Movement of people from one place/country to another for residence/work.
Analysing the external environment to assess opportunities and threats: social and technological
monetary policy
Central bank action controlling money supply/interest rates to influence economy.
online business
A business that primarily operates via the internet, selling products or services online rather than through physical pr...
payback period
Time required to recover initial investment from cash flows.
political environment
Government systems, policies, stability affecting business.
Porter's five forces
A strategic framework analysing five competitive forces that determine industry profitability and attractiveness.
protectionism
Government policies that restrict international trade to protect domestic industries from foreign competition.
strategy
Long-term plan achieving objectives.
Mission, corporate objectives, functional objectives and strategy
SWOT analysis
A strategic framework assessing a business's internal Strengths and Weaknesses, and external Opportunities and Threats.
technological change
Advances in technology affecting business.