Business revision cards Flashcards
Answer questions
Name 2 external sources of finance
Bank loan
Overdraft
Trade credit
Crowdfunding
Define an entrepreneur
Spots an opportunity, Prepared to take a risk, Invests in the buisness
What is a human Resource?
People that deal with finances in a business
Characteristics of an entrepreneur
Risk taker
Creative
Motivated
Problem solver
Leadership
Management skills
Good with people
Negotiation
True or false if you increase the time on a bank loan the monthly cost will decrease but you will pay more interest
True
What is a bank loan?
Money that you borrow from a bank paying them back monthly
What is an overdraft?
To take out more money than you own (going into negatives)
What is trade credit?
Where two businesses help each other by allowing them to buy things and pay later
What is retained profit?
Retained profit is where you save up profits you have earnt
What is sale of assets?
When you sell assets of your company e.g. stocks, a computer, a tractor….
What does owners capital mean?
Its what the owner invests in the business out of there own money
What is New partners capital?
Its to bring in a new business partner this could be to bring in finance and use their expertise
What’s a share issue?
To share money to friends and family
If its a private limited company- it can issue shares to family and friends of the owners only
As if its a public limited company- They can float the share on the stock market and sell to anyone
Name 2 internal sources of Finance
Retained Profit
Sale of assets
Owners capital
What source of finance is Money is raised by a business by inviting sponsors to contribute money, provide a loan or buy equity in the business.
Crowd funding.
What is an advantage with using crowd funding
Access to large number of investors without losing much control.
Which source of finance may need you to provide security?
Bank loan
What is most suitable for needing immediate cash flow
Bank loan
Retained profit
Trade credit
Share issue
Trade credit
What is the formula for Total Cost?
Total Cost (TC) = Fixed Cost (FC) + Variable cost (VC)
What is the formula for Trade credit?
(TR)= P (PRICE) X Q (QUANITIY)
What is the formula for Gross profit
(GP)= (SR) sales revenue - (VC) variable cost
Chain of Command definition
Giving someone a task and them they give the next person a task.
The flow of information threw a business
Span of Control definition
Is the number of staff who report directly to manager.
Subordinate definition
Are the employers that a line manager is responsible for
People below you in a business.
