Chapter 3: Finance Flashcards
Profit
What is left after costs have been deduced from revenue
Loss
When revenue is less than costs
Costs
The expenses a business pays for in producing goods and services
Revenue
The amount of money a business receives from selling goods or services
Cash
Money that the business has available to it straight away, such as money in its bank account
Forecast
A technique where the business attempts to estimate
Cash Flow Forecast
A prediction of a business’s future cash inflows and outflows, showing the closing balance
Bank Loan
Finance provided by the bank that will be paid back over a set period
Loan From Friends and Family
Finance provided by friends or family where the interest rate and repayment periods are agreed with them
Overdrafts
A flexible arrangement that allows a business to spend more money than it has in its bank account, as and when it needs the finance
Mortgage
Long-term finance loan for purchasing a building
Trade Credit
Suppliers who allow debts for goods and services to be paid one or two months after delivery
Grant
Money given to a business by a government or organisation
Net Cash Flow
Difference between cash in and cash out of a business over a time period
Opening balance
The money the business has at the start of the month. It is the closing balance from the previous month.
Closing balance
The amount of cash the business has at the end of each month
