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Description
Flashcards by Mr_Lambert_Hungerhil, updated more than 1 year ago
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Created by Mr_Lambert_Hungerhil
almost 10 years ago
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| Question | Answer |
| Cash Flow | The flow of cash into and out of a business |
| Financial Management | Deliberately changing monetary variables like cash flows to achieve financial objectives such as improved cash flow |
| De-stocking | Reducing the levels of stocks in a business |
| Trade Credit | Where a supplier gives a customer a period of time to pay for a bill (or invoice) for goods or services once they have been delivered |
| Profit | Occurs when the revenues of a business are greater than its costs over a period of time |
| Revenues | The amount of money received from selling goods or services over a period of time |
| Break-even point | The level of output where total revenues are equal to total costs; this is where neither a profit nor a loss is being made |
| Total revenue | The revenue earned by a business from the sale of a given quantity sold x average price |
| Total Costs | All the costs of a business; equal to fixed costs plus variable costs |
| Fixed Costs | Costs which do not vary with the amount produced, such as rent, business rates, advertising costs, administration costs and salaries |
| Variable Costs | Costs which change directly with the number of products made by a business, such as the cost of buying raw materials |
| Break-even chart | A graph which shows total revenue and total cost, allowing the break-even point to be drawn |
| Margin of Safety | The amount of output between the actual levels of output where profit is being made and the break-even level of output; if the margin of safety is zero, then production is at or below the break-even level |
| Financing a business | How a business obtains money and other financial resources to start up, expand and if necessary pay off losses it has made |
| Internal Sources of Finance | Finance which is obtained within the business such as retained profit or the sale of assets |
| External Sources of Finance | Finance which is obtained from outside the business such as bank loans and cash from the issue of new shares |
| Retained Profit | Profit which is kept back in the business and used to pay for investment in the company |
| Equity or share capital | The monetary value of a business that belongs to the business’ owners. In a company, this would be the value of their shares |
| Share | A part ownership in a business; for example a shareholder owning 25% of the shares of a business owns a quarter of the business |
| Overdraft | Borrowing money from a bank by drawing more money than is actually in a current account. Interest is charged on the amount overdrawn |
| Bonds | A long-term loan where typically interest is paid at regular intervals like a year and the loan is all repaid at the end of the life of the bond. Bonds are traded on stock markets. |
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