BUSINESS finance Flashcards
Definition of: Current Assets
Assets that can be cponverted into cash within 1 year or less ie cash in bank, inventory etc
Defintion of Fixed Assets
Long Term Assets that a company owns ie property, land, vehicles
Defintion of Total Assets
All current and fixed assets
Definition of: Current Short Term Liabilities
Current and short term liabilities are liabilities that are due and payable within 1 year ie accounts payable, wages, income tax
Definition of: Current Long Term Liabilities
Liabilities that are due after a year or more
Definition of: Total Liabilities
Adding all short term and long term liabilities
Definition of: Net Assets
Total assets - total liabilities
Definition of: Annul Budget
Business expenditure for a financial year, helps businesses balance out the expenditure with the income/revenue
Definition of: Employment Agreement / Awards
Minimum conditions for employees with employment contracts/agreements setting out employment conditions
Definition of: Balance Sheet
Shows a picture of the financial health of a business at a given moment in time, it lists business assets & liabilities. Helps work out your working capital ($ for day to day activity) & business liquidity (how quickly you can pay your current debts)
Definition of: Equity
The value ownership interest in a business calculated by deducting liabilities from assets
Definition of: BAS
Business Activity Statement used to report your business tax entitlements and obligations for a reorting period. Inc GST, PAYG, FBT
Definition of: Business Plan
Document setting out a businesses future objective and strategies to achieve them
Definition of: Capital
Wealth min the form of money or property owned by a business
Definition of: GST
10% tax on most goods, services & other items sold or consumed Businesses should register for GST when a gross business income (minus GST) is over $75,000 annually
Definition of: Fixed Cost
A cost that is not part of producing a good or service
Definition of: Gross Profit
Difference between sales and the direct cost of making the sales
Definition of: Gross Income
Total money earned before deducting expenses
Definition of: Net Profit
A cost that is not part of producing a good or service
Definition of: KPI - Key Performance Indicator
A measurement using data to show how well your business is performing, looks at gross sales, net sales, gross profit and net profit between jobs annually
Definition of: Liquidity
How quickly you can convert assets to cash
Definition of: Liabilities
financial expenses or amount owed
Definition of: Margins
Difference between the selling price of a good or service and the profit
Definition of: PAYG - Pay As You Go
PAYG withholding income tax from an employee or a contractors salary or wage. Employer pays tax directly to ATO
Definition of: Profit & Loss Statement
An income statememnt listing sales and expenses, can be used to work out gross and net profit of a business
Definition of: Receipts
Document confirming payment and sale of a good or service
Definition of: Tax Invoice
Shows the supply of goods and service at a specific price. Tax invoice is required when claiming GST credit
Definition of: Working Capital
Cash available to a business for day to day expenses
Definition of: Overhead Expenses
Fixed costs associated with operating a business such as rent or marketing
Definition of: Prime Cost Item
PC item is an item not selected at time of signing a contract. PC item includes the cost of supply of the item only ie appliances
Definition of: Provisional Sum
PS are an allowance for works that will be carried out but cannot be priced exactly at the time of signing a contract. Can include materials, labour and plant hire. Ie site works, service connections and structural elements not yet designed.
Definition of: Dispute Resolution
An impartial person assisting those in a dispute to resolve any issues between parties. Main types of DR are Mediation, Arbitration and Conciliation
