Analysing Financial Performance Flashcards
What is a budget
Financial plan for the future, helps to prevent financial trouble
What types of budgets can a business make and what will they use it for
create a sales revenue budget, an expenditure budget and a profit budget - an internal control mechanism for managers
Why is it helpful for managers to know when money is going in and out of a business
Failure to do this can result in cash flow difficulties and could lead to insolvency
Budgeted (predicted) gross profit
Sales revenue - cost of sales
Net profit
Types of financial accounts
balance sheets, the trading, profit and loss account, ration analysis
Balance sheets other name
statement of financial position
Why would a business use ratio analysis
to calculate and interpret key performance indicators.
What is a balance sheet
is a statement of a business’s assets and liabilities at a specific point in time. It shows how much a business is worth
Business assests
What the business owns
Business liabilities
What the business owes
