Finance for business Flashcards
(12 cards)
A business _______ when it earns enough money to cover its costs
Break Even
What are operating costs?
the cash required for a business function on a day to day basis.
How to do you calculate revenue?
No. of sales × Sales price
How do you calculate total cost?
Fixed cost + Variable cost
What are direct costs?
The money required to produce products or run services. (Flour, wheat etc.)
What are indirect costs?
Costs that aren’t necessarily assigned to a specific object. (Wages, Utilities etc.)
How would investing in advertisement affect the businesses revenue?
he revenue would increase(In a majority of cases).
How do you calculate profit/loss ?
Total sales income - Total costs
How do you calculate net cash flow?
Total inflows - Total outflows
How do you calculate closing balance?
Opening balance + Net cash flow
What is a creditor?
A person or group that the business owes money to.
What is a debtor?
A person or group who owes money to the business.
