Definition of Business failure

Business failure

A business that has terminated with a loss to creditors.

Basic business strategies

Key strategies a firm intends to pursue in carrying out its business plan.

Business cycle

Repetitive cycles of economic expansion and recession.

Business risk

The risk that the cash flow of an issuer will be impaired because of adverse economic
conditions, making it difficult for the issuer to meet its operating expenses.

business intelligence (BI) system

a formal process for gathering and analyzing information and producing intelligence to meet decision making needs; requires information about
internal processes as well as knowledge, technologies, and competitors

business process reengineering (BPR)

the process of combining information technology to create new and more effective
business processes to lower costs, eliminate unnecessary
work, upgrade customer service, and increase
speed to market

business-value-added activity

an activity that is necessary for the operation of the business but for which a customer would not want to pay

failure cost

a quality control cost associated with goods or
services that have been found not to conform or perform
to the required standards as well as all related costs (such
as that of the complaint department); it may be internal or
external

Internet business model

a model that involves
(1) few physical assets,
(2) little management hierarchy, and
(3) a direct pipeline to customers

operating risk (business risk)

Risk in firm’s operating income.

Business Cycle

Fluctuations of GDP around its long-run trend, consisting of recession, trough, expansion, and peak.

Political Business Cycle

A business cycle caused by policies undertaken to help a government be re-elected.

Real Business Cycle Theory

Belief that business cycles arise from real shocks to the economy, such as technology advances and natural resource discoveries, and have little to do with monetary policy.

Failure analysis

The examination of failure incidents to identify components
with poor performance profiles.

Business Expansion Investment

The use of capital to create more money through the addition of fixed assets or through income producing vehicles.

High-Risk Small Business

Firm viewed as being particularly subject to risk from an investors perspective.

Commercial Business Loan (Credit Insurance)

An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes.

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