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Business > Chapter 3: Business Finance > Flashcards

Chapter 3: Business Finance Flashcards

(64 cards)

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1
Q

instalment

A

a series of regular payments made until all the money owed has been repayed

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2
Q

short term finance

A

money borrowed for one year or less

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3
Q

long term finance

A

money borrowed for more than a year

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4
Q

capital

A

finance provided by the owners of a business

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5
Q

internal finance

A

finance generated by the business from its own means

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6
Q

retained profit

A

profit held by a business rather than returning it ti the owners and which may be used in the future

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7
Q

assets

A

resources used or owned by a business

such as: cash.stock,machinery,tools and equipment

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8
Q

external finance

A

finance obtained from outside the business

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9
Q

bank overdraft

A

agreement with a bank where a business spends more money than it has in its account

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10
Q

trade payable

A

buying resources from suppliers, such as raw materials and components and paying for them at a later date

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11
Q

repossess

A

to take back

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12
Q

debenture

A

long term security yielding a fixed rate of interest, issued by a company and secured against assets

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13
Q

hire purchase

A

buying specific goods with a loan, often provided by a finance house

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14
Q

rights issue

A

sale of new shares to existing shareholders

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15
Q

venture capitalists

A

specialist investors who provide money for business purposes (often to new businesses)

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16
Q

crowd funding

A

where a large number of individuals (a crowd) invest in a business venture using an online platform
(avoids using a bank)

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17
Q

cashflow

A

flow of money into and out of a business

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18
Q

liquid asset

A

asset that can easily be changed into cash

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19
Q

overheads

A

money spent regularly

example; on rent,insurance,electricity

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20
Q

insolvent

A

inability to meet debts

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21
Q

cash flow forecast

A

prediction of all expected receipts and expenses of a business over a future time period (shows the expected cash balance at the end of each month )

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22
Q

cash inflow

A

flow of money into a business

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23
Q

cash outflow

A

flow of money out of a business

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24
Q

drawings

A

money taken out of the business by the owner for personal use

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25
closing cash balance
amount of cash that the business expects to have at the end of each month
26
costs
expenses that must be met when setting up and running a business
27
fixed costs
costs that do nit vary with the level of output
28
variable costs
costs that change when output levels change
29
total costs
fixed costs and variable costs added together
30
total revenue
money generated from the sale of output | price times quantity
31
Amortization
is a cost associated with the falling in value of certain types of assets
32
break - even point
level of output where total costs and total revenue are the exactly the same (neither a profit or a loss)
33
break - even chart
graph that shows total cost and revenue; the break even point is where the business makes profit
34
bulk buying
buying goods in large quantities (which is usually cheaper)
35
stockpile
large supply of goods that are being kept for possible use in the future
36
statement of comprehensive income
financial document showing a firms income and expenditure in a particular time period
37
profit
money left after all costs have been subtracted from the revenue
38
distributed profit
profit that is returned ti the owners of a business
39
retained profit
profit held by a business rather than returning it to the owners (may be used in the future)
40
dividend
share of the profit paid to shareholders in a company
41
finance cost
interest paid on loans
42
finance income
interest received by the business on deposit accounts
43
normal profit
minimum profit a business needs to make to retain the interest of the owners
44
adjustments
profits made outside of the businesses main source of income
45
statement of financial position
summary at a point of time of business assess, liabilities and capital
46
assets
resources used or owned by a business (such as cash stock,machinery,tools and equipment )
47
liabilities
debts of the business which provide a source of funds
48
capital
finance provided by the owners of the business
49
non current asset
assets that lasts for more then a year
50
current assets
assets that are likely to be changed into cash within a year
51
liquidity
ease in which assets can be sold for cash
52
trade receivables
amounts of money that are owed to a company by its customers
53
current liabilities
debts that have to be repaid within a year
54
net current assests
current assets minus current liabilities (also known as working capital)
55
non current liabilities
debts that are payable after 12 months
56
net assests
value of all assets without the value of all liabilities | the total of the bottom part of the balance sheet
57
goodwill
value that a company has because it has a good relationship with its customers and suppliers
58
external finance
finance obtained from outside the business
59
bank overdraft
agreement with a bank
60
profitability ratios
measure the performance of the business and focus on profit, revenue and the amount of money invested
61
liquidity ratios
measure how easily a business can pay its short term debts (such as wages or suppliers)
62
quantitative information
information expressed in numbers
63
excise duties
taxes on selected goods (such as petrol and tobacco)
64
auditing
accounting procedure that checks thoroughly the accuracy of a company's accounts

Business (5 decks)

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