3.5 Flashcards
finance cost
interest paid by a business on any borrowed money
finance income
interest received by a business on any money held in deposit accounts
gearing ratios
exploration of the capital structure of the business by comparing the proportions of capital raised by equity and debt
profitability or performance ratios
illustrations of the relative profitability of a business
ratio analysis
involves the calculation and interpretation of key financial performance indicators to provide useful insights
return on capital employed (ROCE)
the profit of a business as a percentage of the total amount of money used to generate it
calculated:
operating profit/capital employed x100
window dressing
the legal manipulation of accounts by a business to present a financial picture that is to its benefit
e.g. cash; postpone paying suppliers, so that the period-end cash balance appears higher than it should be
labour productivity
output per worker in a given time period
labour retention
the number of employees that remain in a business over a period time
labour turnover
the rate at which staff leave a business
rate of absenteeism
the number of staff who are absent as a percentage of the total workforce, over a time period
