Definitions Flashcards
(30 cards)
Debt
Refers to loans and other types of credit that must be repaid in the future, usually with interest.
Capital
Money needed to produce goods and services
Fixed Capital
Long term elements/assets that stay in the business permanently
Working Capital
Known as operating capital
Short term needs(expenses) wages/salaries water and lights and raw materials - often Monthly expenses.
Grants
Amount given by the government for certain types of business projects. Does not have to be repaid
Equity
Readily available- savings
Angel funding
Wealthy entrepreneurs that offer/invest a share into a business
Crowdfunding
Raising money through community
Venture Capital
Funding by individuals to startup or expand in the business - shares for business
Bank loans
Used as Long term financing - borrowing money from the back with an interest rate attached- paid back in installments over a certain period of time
Overdraft
Short term financing, overdraft on a bank account which gets paid back over a set of time
Asset based loans
Offered to successful business - this loan is only allowed to buy assets with - if not repaid assets can be claimed back.
Bond
Written and signed promise to pay a certain sum of money on a certain date, or on fulfillment of a specified condition
Lease
Contract outlining the terms under which one party agrees to rent property owned by another
Receivable finances
Cash flow shortage
Debtors - money still need to be reveived
Crypto Currencies
Bitcoin Ripple
Digital currencies bypasses central banks and transactions are regulated by encryption techniques.
Budgeting
Planning tool to estimate amount of income and expenditure
Budgeting
Planning tool to estimate amount of income and expenditure
Capital Budget
Estimates the fixed capital
Plans purchasing, upgrading and changing of fixed assets such as building and machinery
Cash budget
Asseses Working capital
Asseses what is needed for the business to operate
50/20/30
50% - obligations such as mortgage, groceries and debt paid after tax-income(Must haves)
20% - Savings and Investments - Retirement and pension fund - Life insurance - emergency funds and emergency savings.
30% are WANTS its just a luxury - Netflix, dining out, vacations.
Income statement/ comprehensive statement
3 Primary financial statements used
Income and costs - performance over a time period
Balance sheet - assets and liabilities
Cash flow statement - how business has generated and disposed of cash and liquid funds
Sourcing
Requirements definition Catagory analysis Supplier identification RFI/RFQ Negotiate comtract Manage contract Supplier management
Purchasing
Identifying need
Purchase requisition
Approval
Purchase order
