1.3 flashcard
Financial Objectives
Targets expressed in money terms such as making a profit, earning income or building wealth
Variable costs
Costs which change directly with the number of products made by a business, such as the price of raw materials.
Revenues/Sale Revenue/Sales Turnover
Amount of income received from selling goods or services over a given time
fixed Costs
Costs which do not vary with the output produced - rent, advertising, salaries
Total costs
All the costs of the business, equal to fixed costs + variable costs
Profit
Occurs when revenues of a business are greater than its costs over a period of time
Loss
Occurs when revenues of a business are less than its cost over a period of time
Cash
Notes, coins and money in the bank
Cash flow
flow of cash in and out of the busines
Inflow
The cash flowing into a business, its recipts
Net cash flow
The receipts of a business minus its payments
Outflow
The cash flowing out of a business, its payments
Cash flow forecast
A prediction of how cash will flow through a business in a period of time in future
Insolvency
business can no longer pay its debts
Opening balance
Amount of money in a business at the start of a month
