Flashcards in For exam!! Deck (20):
What is a fixed asset?
A fixed asset is anything that you own as a business that can be useful to your business for longer than one year.
What are two examples of fixed assets?
What is a current asset?
A current asset lasts less than 12 months. Once you use them they then they have gone and need to be replaced.
What are two examples of current assets?
What is a current liability?
Current liabilities are things that a business will need to pay out for within 12 months.
What are two examples of current liabilities?
What is a long term liability?
A long term liability is something that you owe that can be payed back after a year.
What are two examples of long term liabilities?
What is working capital (net current assets formula)?
Current assets - current liabilities
What is the formula for net assets?
Total assets - total liabilities.
What is the margin of safety?
Difference between your break even point and the number of units you sell.
What is an income statement?
Statement of income and expenditure - usually produced every 12 months.
How do you calculate revenue?
selling price x number of products sold
How do you calculate profit?
revenue - total costs
How do you calculate gross profit?
revenue- cost of sales
How do you calculate net profit?
gross profit - expenses
2 examples of fixed costs?
Rent and salaries
2 examples of variable costs
Materials and tax.
2 sources of external finance
Loan from family and friends + loan from bank.