2.1 Flashcards
Economic variable
Features of an economy which have effects on consumers e.g unemployment, inflation, exchange rates
Internal finance
Raising of capital or cash from within the business
Personal savings
Internal finance of personal finance from the owner
Retained profit
Internal finance through profit which can be re invested into business or kept by business
Sale of Assets
Internal finance where assets are sold to generate cash
Bank loan
Money borrowed from bank paid back with interest over time
Business Angels
Individuals who invest in a business in exchange for shares in a business
Crowd funding
Large number of individuals provide funding for a business or project in return for shares
External Finance
Money raised from outside the business
Grant
Sum of money given by the government or another organisation
Leasing
A contract to acquire the use of resources such as property or equipment
Loan
An amount of money borrowed but usually repayable after fixed term of more then 12 months
Overdraft
Business has negative bank balance in bank account because amount withdrawn is greater than current balance
Peer to Peer funding
Person lends money to other individuals or businesses via online transactions
Share Capital
The finance raised by a business selling new shares
Trade Credit
Where a firm receives stock inventory or raw materials from a supplier in which they do not have to pay for until later date
Venture Capital
Business issues shares to a small number of investors in return for capital for the company
Liability
Obligation to pay another person, lender or supplier
Limited Liability
Unlimited Liability
Business Plan
Document giving details of variety of aspects about business to provide strategic look at business to attract investors
Cash Flow
Movement of cash in and out of a business over a period of time
Cash Inflow
The flow of cash into a business
Cash Outflow
The flow of cash out of a business
Cash Flow Forecast
Predicted flow of cash into and out of a business over a period of time
Closing balance
Cash left in account at the end of the month
Net cash flow
Difference between cash flowing in and out of a business over a period of time
Opening Balance
Cash in the bank on the first day of the month
