AP®︎ Business with Personal Finance: Unit 4 Flashcards

The process of planning, organizing, leading, and evaluating a business’s use of resources to meet its goals and objectives

Planning, organizing, leading, and evaluating a business’s use of resources to achieve its goals

Assigning responsibilities and arranging human, financial, and physical resources to carry out a plan

Communicating direction, motivating people, building teams, and resolving conflict so employees can perform effectively

Comparing actual performance and resource use with expectations, diagnosing gaps, and using the results to improve future plans

A manager who establishes overall direction, makes major resource decisions, and coordinates the business as a whole

A manager who translates broad goals into plans for a specialized area and coordinates its work with the rest of the business

A manager who oversees day-to-day work by assigning tasks, coaching employees, addressing problems, and communicating standards

Influencing, guiding, and motivating people to work toward shared business goals

Accurate, audience-appropriate expression, listening, interpretation, and feedback that allow a recipient to understand and respond appropriately

A person or group that affects or is affected by a business’s decisions and performance

Seeking to understand both a message’s substance and the speaker’s perspective by attending, clarifying, and checking understanding before responding

The willingness to direct effort toward a result

A capability the business performs especially well that contributes to its value or competitive advantage

Obtaining work from an outside provider rather than performing it with the business’s own employees

Learning that develops the knowledge and skills employees need to perform their work effectively

Training that combines structured instruction with supervised practical experience

Training conducted while an employee performs or observes actual work

Education or training that updates or expands an employee’s skills and knowledge over time

An employee who works the business’s regular full-time schedule, usually on continuing and predictable responsibilities

An employee who works fewer hours than the business’s full-time schedule

An employee hired for a limited period or purpose, such as seasonal demand, a short project, or absence coverage

A worker engaged under a contract to provide specified work or services, often for a specialized or project-based need

What employees receive in exchange for their work, including direct pay and possible benefits

Pay based on time worked, calculated as hours worked × wage rate

A stated amount of pay for a year, commonly distributed across regular pay periods

Pay based on sales or another transaction measure, calculated as the qualifying amount × commission rate

Pay based on the number of qualifying units completed, calculated as units × rate per unit

A plan that distributes part of the business’s profit to eligible employees

The lowest hourly wage an employer may legally pay a covered employee

Nonwage compensation such as employer health-insurance or retirement contributions, disability insurance, educational reimbursement, and paid time off

A tax-advantaged account used by an eligible person to save and pay for qualified medical expenses

Insurance that replaces part of an employee’s income when an illness or injury prevents the employee from working

An employee benefit through which an employer repays some or all eligible education or training expenses

Compensated time away from work for purposes such as vacation, illness, or personal needs

A link between a desired behavior or result and a reward

The degree of independence and discretion an employee has in deciding how to perform work

A business’s ability to keep capable, productive employees

A data point selected to measure business performance, progress toward goals, or a strategy’s effectiveness

A key performance indicator that measures monetary performance such as revenue, costs, profit, margins, or cash flow

A key performance indicator that measures performance not stated directly in money, such as satisfaction, retention, quality, or delivery accuracy

Amount earned from selling goods or services during a period; revenue = units sold × selling price per unit

Direct cost associated with the goods or services sold during a period

Revenue remaining after COGS is deducted; gross profit = revenue − COGS.

Percentage of revenue remaining after COGS; gross profit margin = gross profit ÷ revenue × 100

Costs of running the business that are not classified as COGS, such as rent, marketing, utilities, and administrative salaries

Profit from normal operations; operating profit = revenue − COGS − operating expenses, or gross profit − operating expenses

Percentage of revenue remaining as operating profit; operating profit margin = operating profit ÷ revenue × 100

Cash moving into and out of a business during a period, which differs from accounting profit

Average cost of gaining a new customer; CAC = customer-acquisition spending ÷ new customers acquired for the same period

Estimated value generated over a customer relationship; basic revenue-based CLV = average purchase amount × purchases per period × customer lifespan

A summary of customers’ evaluations of a product, service, or interaction, reported on a defined scale or as a percentage

Ability to keep existing customers; retention rate = (ending customers − new customers acquired) ÷ starting customers × 100

The total units sold, sales transactions, or sales revenue during a stated period, with the unit identified

A business’s portion of sales in a defined market; market share = business sales ÷ total market sales × 100

Average relevant cost for each unit; per-unit cost = total relevant cost ÷ number of units

Cost of delivering orders, reported as a total or as average delivery cost = total delivery cost ÷ number of deliveries

Percentage of orders completed without error; order accuracy rate = accurate orders ÷ total orders × 100

Percentage of deliveries arriving by the consistently defined promised time; rate = on-time deliveries ÷ total deliveries × 100

A reference point used to compare KPI data with a standard and assess performance

A performance standard based on the same business’s data from an earlier month, quarter, year, or other period

A performance standard based on results typical of comparable businesses or the relevant industry

A plan or broad approach for achieving a goal; it explains how a business will move toward a desired outcome and should fit its capabilities and environment

Specific actions or approaches used to carry out and advance a strategy

An attribute or capability that allows a business to create greater customer value or outperform competitors

A structured decision process: define the Problem, develop Alternatives, establish Criteria, Evaluate alternatives, and Decide on the best approach

Standards used to judge alternatives based on the business’s goals, strategy, constraints, and stakeholder concerns

Quantifiable costs and benefits can be expressed numerically; intangible ones are difficult to measure precisely but may still be important

Additional profit generated by an investment ÷ investment cost; multiply by 100 to express it as a percentage

A tool for systematically evaluating relevant internal and external variables of an option against long-term goals and strategy

Making choices with incomplete information, limited time, uncertainty, bias, or an inability to evaluate every alternative

Framework for evaluating a market’s competitive intensity, attractiveness, and potential profitability through rivalry, new entrants, substitutes, customer power, and supplier power

Intensity of competition among current direct competitors, shaped by their number, product differentiation, and pricing power

Distinguishing a product from competitors’ offerings through features, quality, service, branding, or other valued characteristics

Ability to set or raise prices without losing enough customers to make the change unprofitable

Risk that new businesses can easily enter a market and compete for market share; the threat is strong when barriers to entry are low

Conditions that make market entry difficult or costly, such as capital requirements, patents, regulations, economies of scale, or established brand loyalty

Risk from different types of goods or services that meet the same customer need; the threat is strong when many attractive alternatives are available

Buyers’ ability to pressure a business to lower prices or improve terms, strengthened by few significant customers, high acquisition costs, and low customer switching costs

Monetary and psychological costs a customer incurs when changing the product or brand purchased

Resource providers’ ability to raise input costs or impose unfavorable terms, strengthened by few qualified providers and high costs of switching suppliers

Costs of the labor, materials, equipment, energy, and other resources used to produce a good or service

A market’s potential for businesses to earn profits; strong competitive forces reduce attractiveness, while weak forces increase it

Framework for evaluating the internal strengths and weaknesses and external opportunities and threats affecting a business’s goals, competitiveness, and viability

Internal advantages that help a business achieve its goals or compete successfully, such as valuable competencies, resources, reputation, or intellectual property

Internal disadvantages, missing capabilities, or poorly performing resources that impede performance or make a business more vulnerable

Favorable external factors beyond the business’s direct control that it may capitalize on to improve its success

Unfavorable external factors beyond the business’s direct control that may harm it or interfere with its goals

Valuable nonphysical resources such as brands, patents, copyrights, reputation, data, and organizational knowledge

A framework for evaluating political, economic, social, technological, environmental, and legal factors in a business’s external environment

Government actions, policies, stability, taxation, and trade conditions that may affect a business

Economic conditions such as growth, inflation, interest rates, exchange rates, income, and unemployment that may affect a business

Demographic, cultural, lifestyle, and consumer-attitude trends that may affect a business

Technological developments, infrastructure, automation, and innovation that may affect a business or industry

Ecological and natural-resource conditions, climate issues, and sustainability expectations that may affect a business

Laws, regulations, court decisions, and legal requirements that govern a business’s operations

An innovation that begins with a simpler, cheaper, or more accessible offering and eventually displaces established products or businesses