1.3 Putting a Buisness Idea into practice Flashcards
revision
Name the 6 external sources of finance
Bank Loan, Overdraft,Share Capital, Adventure Capital, Crowdfunding, Trade Credit
Name The 2 internal sources of finance
Personal Savings, Retained Profit
State the formula for Profit
Total Revenue-Total Costs
State the formula for Revenue
PriceXQuantity
State The Formula for Total Costs
Fixed Costs+Variable Costs
State The Formula For Variable Costs
Variable Costs per mitXQuantity
State The Break Even Point Formula
Fixed Costs/(Selling Price-Variable Costs)
What is a Break Even
Whenn total revenue equals total costs
What is a margain of safety
The difference between the current level of sales and Break Even Point
State The formula for Margain of Safety
Current output / Sales- Break even output
State The Impact on Beo If…:
a) Price Falls
b)Price Rises
c)Costs Fall
d)Costs Rise
State The Impact on Beo If…:
a)Beo Rises
b)Beo Falls
c)Beo Falls
d)Beo Rises
Define Cash Flow
The notes and coins a firm has to pay for any expenditures in the short term
What is The difference between cash flow and profit
Cash flow is short term and profit is long term
State teh formula for NET cash flow
Total inflows- Total outflows
Name 2 Advantages and Disadvantages of Cash flow forecasts
A-Allows planning for any payments needed in the future
Can allow buisneses to see if they need to gain profit quicker
D-Only a rough estimate and not very accurate
Only accounts for a short portion of the year
