Profitability and unprofitability

UNIT 12

Organizations 2

1) Freelance( freelancer) - freedom of working for myself. To use the official term- sole trader (sole owner and sole proprietor) .

2) Self-employed -A self-employed person refers to any person who earns their living from any independent pursuit of economic activity.

3)  Partnership - is an arrangement between two or more people to oversee business operations and share its profits and liabilities.

4) Partners – there are no shareholders in the organization apart from the two of them.

5) limited liability partnership (LLP)- if the partnership goes bankrupt – runs out of money – the people to whom the partnership owes money can take the company’s assets to pay the debts, but they can’t take personal assets such as the partners’ houses or cars.

6) Bankrupt -unable to pay what you owe.

7) Assets- is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit.

8) Limited company -is a general form of incorporation that limits the amount of liability undertaken by the company's shareholders.

9)  Incorporated - this shows that it is a corporation – used especially in the US for companies with limited liability, and also used in the UK in the names of some big companies.

10)  Public limited company - its shares are bought and sold on the stock exchange.

11)  Life insurance companies are mutuals-People buying insurance with the company are its members and there are no shareholders. Profits are theoretically owned by the members.

12)   Building societies- which lend money to people who want to buy a house.

13)  Demutualization- is the process by which a customer-owned mutual organization (mutual) or co-operative changes legal form to a joint stock company. It is sometimes called stocking or privatization.

14) Non-profit organizations (BrE) or not-for-profit organizations (AmE)- organizations with ‘social’ aims such as helping those who are sick or poor, or encouraging artistic activity.

15) Volunteers – unpaid workers.

16) Charities - organizations created for the purpose of philanthropic rather than pecuniary pursuits.

17)  Fundraising or fund-raising - is the process of seeking and gathering voluntary financial contributions.

18)  Donate -gift, transfer of money in favor of any organization or person;

 

UNIT 27

Sales and costs

Sales-the goods and services that a business sells, and the money it receives for them from customers.

Sales director - in charge of the sales department.

Revenue or turnover - money from sales.

Sales volume -unit sales.

The sales ( in shops) - are a period when goods are sold more cheaply than at other times.

Costs- the amounts of money that a business spends.

Direct costs- costs are directly related to providing the product, e.g. salaries.

Direct production costs- costs of raw materials, labour, etc.

Fixed costs -do not change when production goes up or down, e.g. rent, heating, etc.

Variable costs - change when production goes up or down, e.g. materials.

Cost of goods sold (COGS) - are the variable costs in making particular goods.

Overheads, overhead costsor indirect costs -are not directly related to production, e.g. administration.

Expenses or operating expenses - some costs, especially indirect ones.

Costing - is the activity of calculating costs.

Costings- amounts calculated for particular things.

Gross margin= selling price – direct production costs.

Net margin, profit margin or mark-up- selling price – total costs. (The net margin or profit margin is usually given as a percentage of the selling price; The mark-up is usually given as a percentage of the total costs).

 

UNIT 28

Make a profit - the product is profitable or profit-making.

Break even -reach break-even point.

Money spinners or cash cows – products that have very good profitability.

Budgeted for – the money that they planned to spend on marketing activities.

Underspent -under budget.

Overspent- over budget.

Diseconomies of scale – an even bigger increase in production costs.

Experience curve or learning curve – as company produces more, it learns how to do things more and more quickly and efficiently.