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90 Cards in this Set
- Front
- Back
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What is hire purchase |
Method of paying for an item in instalments over a period of months or years. This product does become businesses property at last payment |
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What is trade credit |
Defering a payment to supplier, get now pay later
Need a good relationship with supplier |
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What is factoring |
A business sells its debt to raise finance An advantage is business receives most of finance at once other than waiting for it |
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What is hire leasing |
Pay back in instalments, will never be the businesses property |
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What are debentures |
Long term loan only available to PLC |
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What is retained profit |
Profit from the business, has no interest rates on it |
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Total costs |
FC + VC |
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Whats formula for average cost and Unit cost = the cost of producing one unit (same formula) |
Tc / output |
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Formula for contribution |
Revenue- fc |
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Formula for cpu |
Price- vc per unit |
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Formula for break even |
Fc / cpu |
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Advantages of payback method |
Easy to calculate and understand Easy to understand level of risk involved. Longer to pay back= more risk |
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Disadvantages of payback method |
It ignores value of money over time as you can buy less with money than u could years ago Does not take into consideration any cash inflows after payback period Doesn’t measure level of profits from investments |
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Advantages of ARR |
Relatively easy to calculate and understand Measures profitability of the investment Takes into account all the cashflows throughout life if the investment |
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Disadvantages of ARR |
no indication of when cash flows occurs in any given year Ignores value of money over time, could fall Harder to calculate than payback more time consuming |
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How to calculate NPV |
Hahah |
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formula for operating profit |
gross profit- expenses |
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what is venture capital |
funds managed by personal investors |
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formula for profit for the year |
operating profit+ profit from other activities) - net finance costs-tax |
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how to calculate current ratio |
current assets/ current liabilities |
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formula for acid test |
current assets- inventory/ cl |
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how to work out gearing ratios |
Non current liabilities —————————— *100 capital employed |
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Formula for non current assets turnover |
Revenue (turnover) ————————— non-current assets |
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gross profit margin |
gross profit ——————— *100 sales |
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Formula for net profit margin |
net profit (operating p |
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net profit margin |
net profit ——————— *100 sales |
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Return on capital employed |
Operating profit ————————-*100 capital employed |
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Return on capital employed |
Operating profit ————————-*100 capital employed |
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Formula for capital employed |
non current liabilities+ ordinary share capital+reserves |
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What is liquidity |
the ability to convert assets into cash |
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what does acid test ratio show |
measure of a company's liquidity, which is its ability to pay its short-term obligations using only its most liquid assets. |
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how to calculate absenteeism |
Total days absent in the month*100 ———————————————- Total available working days in the month |
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Formula for labour turnover |
no of employees leaving during the yr ———————————————*100 average numbee employee during the year |
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What the formula for lateness |
total no of late arrivals ———————————- *100 total number of scheduled attendances |
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What the formula for lateness |
total no of late arrivals ———————————- *100 total number of scheduled attendances |
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Whats the formula for workforce productivity |
output (per week/ month/ yr) —————————————— *100
average number of employees |
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Formula for gross profit |
revenue-cost of sales |
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what will make an appraisal ineffective |
lack of commitment by staff an inconsistent approach inadequate time allowed for appraisal- employees may see it as a waste of time unrealistic targets being set- managers persuade employees to accept tasks they dont want |
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what is financial accounting |
concentrates on assets , profits, level of cash, their goal is to satisfy shareholders |
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what is financial accounting |
concentrates on assets , profits, level of cash, their goal is to satisfy shareholders |
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what is management accounting |
concentrates on internal finance like evaluating employee performance |
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what are the principles of accounting 7 |
materiality realisation objectivity prudence matching going concern consistency |
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what is financial accounting |
concentrates on assets , profits, level of cash, their goal is to satisfy shareholders |
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what is management accounting |
concentrates on internal finance like evaluating employee performance |
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what are the principles of accounting 7 |
materiality realisation objectivity prudence matching going concern consistency |
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what does consistency mean ( principles of account) |
all accounts are produced the same way |
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what is financial accounting |
concentrates on assets , profits, level of cash, their goal is to satisfy shareholders |
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what is management accounting |
concentrates on internal finance like evaluating employee performance |
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what are the principles of accounting 7 |
materiality realisation objectivity prudence matching going concern consistency |
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what is going concern ( poa) |
assume the business is operating the same way |
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what is financial accounting |
concentrates on assets , profits, level of cash, their goal is to satisfy shareholders |
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what is management accounting |
concentrates on internal finance like evaluating employee performance |
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what are the principles of accounting 7 |
materiality realisation objectivity prudence matching going concern consistency |
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what does consistency mean ( principles of account) |
all accounts are produced the same way |
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what is going concern ( poa) |
assume the business is operating the same way |
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what is matching |
using date of transaction, not when payment organised |
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what is financial accounting |
concentrates on assets , profits, level of cash, their goal is to satisfy shareholders |
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what is management accounting |
concentrates on internal finance like evaluating employee performance |
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what are the principles of accounting 7 |
materiality realisation objectivity prudence matching going concern consistency |
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what does consistency mean ( principles of account) |
all accounts are produced the same way |
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what is going concern ( poa) |
assume the business is operating the same way |
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what is matching |
using date of transaction, not when payment organised |
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what is materiality |
taking into account only the big purchases, not little things as well otherwise its time consuming |
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what is financial accounting |
concentrates on assets , profits, level of cash, their goal is to satisfy shareholders |
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what is management accounting |
concentrates on internal finance like evaluating employee performance |
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what are the principles of accounting 7 |
materiality realisation objectivity prudence matching going concern consistency |
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what does consistency mean ( principles of account) |
all accounts are produced the same way |
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what is going concern ( poa) |
assume the business is operating the same way |
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what is matching |
using date of transaction, not when payment organised |
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what is materiality |
taking into account only the big purchases, not little things as well otherwise its time consuming |
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what is objectivity |
dont oversell the accounts so shareholders by shares, they must be realistic not biase |
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what is financial accounting |
concentrates on assets , profits, level of cash, their goal is to satisfy shareholders |
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what is management accounting |
concentrates on internal finance like evaluating employee performance |
|
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what are the principles of accounting 7 |
materiality realisation objectivity prudence matching going concern consistency |
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what does consistency mean ( principles of account) |
all accounts are produced the same way |
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what is going concern ( poa) |
assume the business is operating the same way |
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what is matching |
using date of transaction, not when payment organised |
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what is materiality |
taking into account only the big purchases, not little things as well otherwise its time consuming |
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what is objectivity |
dont oversell the accounts so shareholders by shares, they must be realistic not biase |
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what is prudence |
dont overstate the financial position, if unsure understate |
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what is financial accounting |
concentrates on assets , profits, level of cash, their goal is to satisfy shareholders |
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what is management accounting |
concentrates on internal finance like evaluating employee performance |
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what are the principles of accounting 7 |
materiality realisation objectivity prudence matching going concern consistency |
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what does consistency mean ( principles of account) |
all accounts are produced the same way |
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what is going concern ( poa) |
assume the business is operating the same way |
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what is matching |
using date of transaction, not when payment organised |
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what is materiality |
taking into account only the big purchases, not little things as well otherwise its time consuming |
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what is objectivity |
dont oversell the accounts so shareholders by shares, they must be realistic not biase |
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what is prudence |
dont overstate the financial position, if unsure understate |
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what is realisation poa |
takes place when the legal ownership of a good has changed not when the payments actually been made |
