Chapter 3: Finance Flashcards
Profit
What is left after costs have been deduced from revenue
Loss
When revenue is less than costs
Costs
The expenses a business pays for in producing goods and services
Revenue
The amount of money a business receives from selling goods or services
Cash
Money that the business has available to it straight away, such as money in its bank account
Forecast
A technique where the business attempts to estimate
Cash Flow Forecast
A prediction of a business’s future cash inflows and outflows, showing the closing balance
Bank Loan
Finance provided by the bank that will be paid back over a set period
Loan From Friends and Family
Finance provided by friends or family where the interest rate and repayment periods are agreed with them
Overdrafts
A flexible arrangement that allows a business to spend more money than it has in its bank account, as and when it needs the finance
Mortgage
Long-term finance loan for purchasing a building
Trade Credit
Suppliers who allow debts for goods and services to be paid one or two months after delivery
Grant
Money given to a business by a government or organisation
Net Cash Flow
Difference between cash in and cash out of a business over a time period
Opening balance
The money the business has at the start of the month. It is the closing balance from the previous month.
