Flashcards in Finance definitions Deck (10)
define profit & formula
revenue - expenditure
amount of money the business has earnt, once costs have been deducted
what is cash flow?
timings of cash flowing in (inflows) and cash flowing out (outflows) of the business
define revenue & formula
amount of money made from sales
quantity sold x price per unit
define fixed costs
costs that do not later with output
define variable costs
costs that alter with output
define total costs & formula
all the expenditure of the business
fixed costs + variable costs
when does profit exist?
In financial records when total revenue is greater than total costs
what is cash?
the physical existence of money within the business
why can profitable businesses fail?
due to lack of cash