Chapter 17: Financial Performance

Question 1

Budgets

Answer 1

Financial plans that forecast revenue from sales and expected costs over a time period

Question 2

Variance analysis

Answer 2

Process of investing any differences between forecasts data and actual figures

Question 3

Cash flow forecasts

Answer 3

State inflows and outflows of cash that a business expects

Question 4

Trade credit

Answer 4

When consumers are allowed to pay over a period of time

Question 5

Break even output

Answer 5

Level of output at which costs exactly equal revenue from sales

Question 6

contribution

Answer 6

Difference between revenue and variable costs

Question 7

Margin of safety

Answer 7

Measures the amount by which a business’s current level of output exceeds break even output

Question 8

Profitability

Answer 8

Financial performance that compares a business’s profits to some other factors such as revenue

Question 9

Profit margin

Answer 9

Ratio that expresses a business profit as a % of its revenue over some trading period

Question 10

Primary market research

Answer 10

Collects and analyses data for the first time to use for marketing purposes