ENT notes Flashcards
Profit Margin
The percent of the final selling price that represents the profit.
Profit margin is important because it helps investors assess if a company’s management is generating enough profit.
[(Selling Price - Cost)/Selling Price] x 100
Break Even Point
The point at which total revenue equals the total cost
Total Cost/Selling Price
A = L + o/e
Assets
Liabilities
Owner’s Equity
Market Share
The percentage of a company’s sales in relation to the total sales of the industry.
Components of a Venture Plan
1) Executive Summary
2) Market Analysis
3) Resource Analysis
4) Operating Strategy
5) Financial Strategy
What an income statement is + What it measures and what accounts go on an income statement
An income statement shows you the company’s income and expenditures
Measures a company’s revenues, expenses and profitability over a period of time
Business Entity Concept
Business entity concept is one of the accounting concepts that states that business and the owner are two separate entities and therefore, should be considered separate from each other.
Raising capital-different ways
Loans
Bond
Investment
Life Cycle of a Business
Pre Startup
Development
Growth
Comfort
Turnaround
Cash Flow
The total amount of money being transferred into and out of a business, especially as affecting liquidity.
Monthly Surplus
The monthly surplus is defined as the amount by which your income is greater than your spendings.
Monthly Deficit
Monthly Deficit means the excess, if any, of the Monthly Payment over the Net Operating Income.
Equity
The amount of money the owner of an asset would be paid after selling it and any debts associated with the asset were paid off.
Variable Cost
Cost that changes
Fixed Cost
Cost that stays the same
