5 finance Flashcards
(16 cards)
financial objectives
cost
revenue
profit
cashflow
capital structure
cost objectives
-functional
-cutting cost
-controling (fixed) cost
-controling unit cost (labour productivity, capacity uitlisation and lean production)
revenue objectives
- Grow internet sales
- Increase market share
- Grow sales revenue at a rate of time
cash flow
looks into cost and revenue, the amount of cash at any specific time
short-term capital to pay short-term debts
receivables
break-even chart
-total cost
-total revenue
-fixed cost
-margin of safety
-break even output
contribution
SP-VC
types of profits
-gross profit
-operating profit
-net profit
ROI vs ROCE
ROCE looks at earnings before interest and taxes compared to capital employed to determine how efficiently a firm uses capital to generate earnings.
ROI compares the profits of an investment compared to the cost of the investment to determine gains.
Both measures are similar in theory, however, ROCE looks at how capital is employed within a firm and is useful when BENCHMARKING within an industry. ROI looks purely at the PROFIT made on an investment.
debt factoring
external and short term
obtained by business selling receivables to third party at a discount
overdrafts
external and short term
great for unexpected cashflow gaps
but not included in gearing
retained profits
internal and long term
share capital
internal and long term
loans
external and middle/long term
venture capital
external and long term
crowd-funding
external and short term
startup companies or growing businesses as a way of accessing alternative funds. It is an innovative way of sourcing funding for new projects, businesses or ideas
-> small sum from large group of individuals
budgeting
0 budgeting vs historical budgeting
