4 Flashcards
What does CAMPARI stand for?
Character, Ability, Margin, Purpose, Amount, Repayment & Insurance.
What is an example of a countercyclical business?
Repair goods business
What is a noncyclical business?
Somethjng that trades in necessities. I.e food, water.
What is working capital?
The difference between current assets and current liabilities. Also known as net current assets
Give an example of current assets?
Stock, cash, debtors
Give an example of current liabilites
Creditors, short term borrowing
What is trade credit?
Provided by suppliers over the period of the goods
What are trade debtors?
Monies to be received from customers of the business
What is the least liquid working capital/ current assets?
Stock
What is a cyclical business?
Mirrors trends in the economy - building Industry first to suffer
What is contract farming?
Agricultural joint venture. Farmer secures services of contractor or neighbour to farm his unit.
What is an example of a short trading cycle?
Sellingn fresh fish daily
What are the key principles of lending?
People/ character Purpose/ amount Repayment capability/ terms Security Remuneration/ margin
What is the cheapest means of borrowing?
Overdraft
What is an overdraft suitable for?
Short term borrowing - i.e purchase of stock