6 Finance Flashcards by Gabriel Selaj

Q

Overdraft

A

Spend more money than have in account

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Q

Overdraft benefit

A

Quick and easy

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Q

Overdraft drawback

A

High interest

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Q

Trade credit

A

Buy mow pay supplier later (30 days)

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Q

Loan disadvantages

A

Interest

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Q

Retained profits disadvantages

A

Once used its gone

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Q

Share capital

A

Sharing shares to raise money

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Q

Share capital disadvantages

A

Owners lose control

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Q

Hire purchase

A

Pay monthly to own smth

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Q

Hire purchase drawbacks

A

Cost more in end

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Q

Government grant

A

Free money from government (dont have to pay back)

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Q

Government grant disadvantage

A

Hard to get

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Q

Internal sources

A

Retained proft and selling assets

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Q

Current liabilities

A

Debts business must pay soon (overdraft)

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Q

Break even benefits

A

Helps sales target

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Q

Break even

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A

Total revenue = total costs

No profit/loss

Q

Break even drawbacks

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A

Not always accurate

Q

Revenue

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A

Price x products sold

Q

Total costs

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A

Fixed costs + variable costs

Q

Gross profit

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A

Revenue - cost of sales

Q

Net profit

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A

Gross profit - expenses

Q

Gross profit margin

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A

(Gross profit ➗ revenue) x 100

Q

Net profit margin

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A

(Net profit ➗ revenue) x 100

Q

Break even

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A

Fixed costs ➗ (selling price - variable costs per unit)

Margin of safety

Actual sales - break even sales

Total inflow

All money come in

Net cash flow

Inflow - outflow

Closing balance

Open balance + net cash flow

Opening balance

Money in - money out

Closing balance

Open balance + money in - money out