Cash Flow Flashcards
What are variable costs?
Costs that change with the level of output e.g raw materials
What are semi-variable costs?
Part of the cost stays the same and part varies in relation to the degree of business activity e.g a worker paid a fixed rate of pay but in addition may receive variable amounts of overtime
What are fixed costs?
Costs that do not vary with output. Remain the same e.g rent
What are total costs?
All the costs incurred in producing something or engaging in an activity
What is total revenue?
The total amount of money coming in from sales
What are total sales?
The amount of sales made in a set time period e.g. one year. It can be expressed as a value (monetary) or volume (quantity)
What is selling price per unit?
The amount a customer will pay for each unit purchased
What are sales in value?
Sales expressed as a monetary value e.g. £
What are sales in volume?
Sales expressed as a quantity e.g. units
What is a cash flow forecast?
Tries to predict the cash flowing into and out of the business. A healthy cash flow is crucial to the survival of a business
What are cash inflows/receipts?
Money coming into the business from various sources e.g cash sales, credit sales, loans, capital introduced, sale of assets and bank interest received
What are cash outflows/payments?
Money going out of a business for various purposes e.g. cash purchases, credit purchases, rent, rates, salaries, wages, utilities, purchases of assets, VAT and bank interest paid
What is opening balance?
The amount of cash available in a business at the end of the start of the month
What is closing balance?
The amount of cash available in a business at the end of the month.
Total costs formula
Total fixed costs + Total variable costs
