powell test Flashcards

1
Q

financial objective

A

a goal or target pursued by the finance function within an organisation

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2
Q

profit

A

the surplus of total revenue over total costs for a business over a trading period

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3
Q

cash flow

A

the movement of cash into and out of a business over a period of time

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4
Q

gross profit

A

income received from sales minus the cost of goods and services sold

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5
Q

operating profit

A

the financial surplus arising from a business’s normal trading activities and before taxation

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6
Q

profit per year

A

a measure of a business’s profits that takes into account a wider range of expenditures and incomes including taxation

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7
Q

revenues

A

are the earnings or income generated by a firm as a result of its trading activities

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8
Q

capital expenditure

A

spending undertaken by businesses to purchase non-current assets such as vehicles and property. It is another term for investment.

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9
Q

capital structure

A

refers to the way in which a business has raised the capital it requires to purchase its assets

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10
Q

budgets

A

financial plans that forecast revenue from sales and expected costs over a time period

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11
Q

variance analysis

A

the process of investigating any differences between forecast data and actual figures

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12
Q

cash flow

A

the movement of cash into and out of a business over a period of time

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13
Q

cash flow forecast

A

state the inflows and outflows of cash that the managers of a business expect over some future period

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14
Q

trade credit

A

offered when purchasers are allowed a period of time (frequently 30, 60 or 90 days) to pay for products they have bought

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15
Q

break even output

A

that level of output or production at which total costs exactly equal revenue from sales.

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16
Q

contribution

A

the difference between revenue and variable costs.

17
Q

margin of safety

A

measures the amount by which a business’s current level of output exceeds break-even output

18
Q

profitability

A

a measure of financial performance that compares a business’s profits to some other factors such as revenue.

19
Q

profit margin

A

a ratio that expresses a business’s profit as a percentage of its revenue over some trading period

20
Q

bank loan

A

an amount of money provided to a business for a stated purpose in return for a payment in the form of interest charges

21
Q

over draft

A

when a business is allowed to spend more than it holds in its current bank account up to an agreed limit

22
Q

venture capital

A

funds advanced to businesses thought to be relatively high risk in the form of share and loan capital.

23
Q

share capital

A

finance invested into a company as a result of the sale of shares in the business.

24
Q

mortgages

A

ong-term loans, repaid over periods of up to fifty years, and used to purchase property

25
Q

opportunity costs

A

the best alternative foregone as a result of a decision.