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36 Cards in this Set
- Front
- Back
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Financial Objectives |
Targets expressed in money terms such as marking a profit, earning income or building wealth |
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Revenues or sales revenue or turnover or sales turnover |
The amount of income received from selling goods or services over a period of time |
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Sales volume |
The number of items or products or services sold by a business over a period of time |
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Fixed costs |
Costs which do not vary with the output produces such as rent, business rates, advertising costs, administration costs and salaries |
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Total costs |
All the costs of a business; it is equal to fixed costs plus variable costs |
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Variable costs |
Costs which change directly with the number of products made by a business such as the cost of buying raw materials |
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Profit |
Occurs when the revenues of a business are greater than its costs over a period of time |
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Loss |
Occurs when the revenues of a business are greater than its costs over a period of time |
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Cash |
Notes, coins and money in the bank |
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Cash flow |
The flow of cash into and out of a business |
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Inflow |
The cash flowing into a business, its RECEIPTS |
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Outflow |
The cash flowing out a business, its PAYMENTS |
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Net cash flow |
The receipts of a business minus its payments |
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Insolvency |
When a business can no longer pay its debts |
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Cash flow forecast |
A prediction of how cash will flow through a business in a period of time in future |
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Opening Balance |
The amount of money in a business at the start of a month |
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Closing Balance |
The amount of money in a business at the end of a month |
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Cumulative cash flow |
The sum of cash that flows into a business over time |
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Trade credit |
Where a supplier gives a customer a period of time to pay a bill or invoice for goods or services once they have been delivered |
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Stocks |
Materials that a business hold. Some could be materials waiting to be used in the production process and some could be finished stock waiting to be delivered to customers |
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Business plan |
A plan for the development of a business giving forecasts of items such as sales, costs and cash flow |
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Long-term finance |
Sources of money for businesses that are borrowed or invested typically for more than a year |
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Short-term finance |
Sources of money for businesses that may have to be repaid either immediately |
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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 |
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Personal Savings |
Money that has been set aside and not spent by individuals and households |
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Share capital |
The monetary value of a company which belongs to its shareholders; for example. if five people each invest £10,000 into a business, the share capital will be £50,000 |
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Shareholders |
The owners of a company |
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Venture Capitalist |
An individual or company which buys shares in what they hope will be a fast growing company with a long-term view of selling the shares at a profit |
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Loan |
Borrowing a sum of money which has to be repaid with interest over a period of time such as 1-5 years |
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Security (or Collateral) |
Assets owned by a business which are used to guarantee repayments of a loan; if a business fails to pay off the loan, the lender can sell what has been offered as security |
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Mortgage |
A loan where property is used as security |
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Dividend |
A share of the profits of a company received by share holders who own shares |
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Retained profit |
Profit which is kept back in the business and used to pay for investment in the business |
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Leasing |
Renting equipment or premises |
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Overdraft facility |
Borrowing money from a bank by drawing more money than is actually in a current account. Interest is charged on the amount overdrawn |
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Factoring |
A source of finance where a business is able to receive cash immediately for the invoices it has issued from a FACTOR, such as a bank, instead of waiting the typical 30 days to be paid |
