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Business > 1.3 > Flashcards

1.3 Flashcards

1
Q

What are financial object for a business?

A
  1. Survival
  2. Profits
  3. Sales
  4. Market Share
  5. Financial security
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2
Q

What are non-financial object for a business?

A
  1. Social Objectives
  2. Personal Satisfaction
  3. Challenge
  4. Independence
  5. Control
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3
Q

Why do business objectives differ between business?

A

Size

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4
Q

Define Private Sector-

A

Controlled by groups or individuals. e.g New Look

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5
Q

Define Public Sector-

A

Controlles, managed and operated by the government e.g NHS

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6
Q

Revenue=

A

Quality of units sold X selling price

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7
Q

Cost-

A

Business have to pay to produce their good

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8
Q

Price -

A

How much something is sold at

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9
Q

Fixed cost-

A

Cost that don’t change depending on the output

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10
Q

What are examples of fixed costs?

A
  • Rent
  • Computer
  • Insurance
  • delivery costs
  • Salary
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11
Q

Variable Costs-

A

Costs that do change with the amount of output

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12
Q

What are examples of variable costs?

A
  • Packaging

- Raw materials

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13
Q

Define salary-

A

Calculated over a year (annually) perod and usually divided by 12 monthly periods

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14
Q

Define wages-

A

Paid by the hours of work completed or contracted. Working hours set can change

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15
Q

Define total costs-

A

The sum of all costs in the business, they are fixed and variable costs added together

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16
Q

Equation for total costs=

A

Fixed costs + Variable costs

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17
Q

Profit=

A

Total revenue - total costs

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18
Q

What does it mean if a number is in brackets?

A

It’s negative

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19
Q

Equation for % change?

A

new-old/old X 100

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20
Q

Define break even?

A

When the business isn’t making a profit or a loss

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21
Q

What is the equation for break even?

A

fixed costs/selling price- variable costs

22
Q

Equation for margin of safety=

A

Actual sales- break even point

23
Q

Define margin of safety

A

The amount of sales the business can loose before they make a financial loss

24
Q

Define supplier

A

A business that sells materials to another business

25
Q

Define invency

A

Don’t have enough money to pay costs

26
Q

Deine cash

A

Money available

27
Q

Define cash flow

A

The relationship between the money flowing into a business and the money flowing out

28
Q

Define cash flow forecast

A

a prediction of how much cash is coming in and going out of a business over a period of time

29
Q

Define cash inflow

A

Any money that come into the business

30
Q

Define cash outflow

A

Any money that comes out of the business

31
Q

Define net cash flow

A

The difference between the money brought in and the money spent for that month

32
Q

What is the equation for net cash flow

A

Inflows- outflows

33
Q

What is the equation for closing balance

A

Net cash flow for the month+ opening balance

34
Q

Define source of finance

A

Where you can get money from

35
Q

Define inflammation

A

Fluctuation in the value of goods/services

36
Q

Define interest

A

The % reward for saving or the % cost of borrowing

37
Q

What is the equation for interest

A

(Total repayment - borrowed amount)/Borrowed amount X100

38
Q

Define internal finance

A

Relates to money that has come directly within the business. There is no cost to the business of using this money

39
Q

Define external finance

A

Always comes from outside the business. There may involve a cost to a business

40
Q

Define calatorol

A

Asset to secure the debt

41
Q

Define short term finance

A

Quickly to pay back. 0-5 years

42
Q

Define long term finance

A

Money either never be repaid back or repaid over a long period of time (3+ years), usually used for start-up costs and expansion

43
Q

What are the 13 sources of finance

A
  1. Personal savings
  2. Capital retained from profit
  3. Bank loan???
  4. Bank over draft
  5. Hire purchase
  6. Leasing
  7. Share capital
  8. Venture capital
  9. Trade credit
  10. Selling asset
  11. Crowdfunding
  12. Mortgage
  13. Government grant
44
Q

Define dividends

A

A return given to shareholder based on profits

45
Q

Define aims

A

The strategic goals of a business; for example to grow

46
Q

Define objectives

A

More specific step; for example to increase market share by 5% over the next year

47
Q

Why are business aims and objectives important

A
  • It gives specific targets by which business performance can be measured
  • Settings objectives can be used to motivate workers to achieve
  • Setting objectives clarifies business direction and decision making
48
Q

What do all aims and objectives need to be

A 
Specific
Measurable
Achievable
Realistic
Time-bound
49
Q

Why might business have different aims and objectives

A
  • Size of the business
  • How old the business
  • Type of business
  • Level of competition
50
Q

What is the equation for variable costs

A

Quantity sold X variable costs per unit

51
Q

Closing balance =

A

Opening balance + net cash flow

Business (10 decks)

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