Cash and Treasury management Flashcards
What is the term used to describe the timing difference between a transaction being recorded and it’s related cash flow?
Lagging
What is Mark up?
Mark up is added to cost of purchases to calculate selling price e.g.
Mark up of 20%
Selling price is Purchase price x 1.2
What is margin?
Sales price is 100% purchase cost is this less the margin, e.g.
20% margin means purchase cost as 80% of sales price
What is output and input tax in relation to VAT
Input = VAT charged on purchases Output = VAT charged on sales
What can the affects of poor liquidity be?
Poor cash flow Bankruptcy Inability to pay suppliers Unable to pay wages/salaries Legal action arising from above
What is the 2010 bribery act?
Active bribery - offering abride
Passive bribery - Accepting a bribe
Bribery of a foreign official
Failing to prevent bribery
Money Laundering regulations?
Asses risk to business
Check identity of customers and beneficial owners
Monitor and report activities to NCA
Ensure controls are in place to prevent
What is the role of the Bank of england?
Banker to the government
Banker to other banks
Responsible for the mint
Influences interest rates
Treasury Bils
Issued by the Government - 91 day certificates issued for short term funding
Gilts
Issued by UK Government for long term funding
Local authority bills
Issued by local authority for short term funding
Certificates of deposit
Issued by banks short term
Billes of exchange
Issued by companies short term funding usually guaranteed by banks
Corporate bills and com
Issued by Companies debt certificates.
What is GDP and what does it mean?
Gross domestic product - total value of what a country produces.
If this falls over two successive quarters a country is considered to be in recession
