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Business > Exam > Flashcards

Exam Flashcards

1
Q

What is ARR?

A

Average rate of return on an investment

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2
Q

What is capital

A

A firms wealth in the form of money or other assets

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3
Q

What is capital employed

A

The total money put into a business

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4
Q

What is credit?

A

An agreement that a customer will pay for something at a later date

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5
Q

What is a current asset

A

An asset that doesn’t last long ( cash)

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6
Q

What is a fixed asset?

A

A long term asset: property, equipment, land

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7
Q

What is gross profit margin

A

Fraction of every pound spend by customers that doesn’t go towards making the product

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8
Q

What is limited liability?

A

Owners of a business not responsible for all the debt

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9
Q

What is margin of safety

A

Gap between current levels of output and the break even output

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10
Q

What is net profit?

A

Profit left when all costs are taken into account

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11
Q

What is net profit margin?

A

Fraction of every pound spent by customers that the business keeps

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12
Q

What is revenue

A

Income earned by a business in a given time period

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13
Q

What is working capital?

A

Money available for day to day operating of a business.

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14
Q

What is output?

A

Amount of goods or services a business produces

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15
Q

What are fixed costs

A

Costs that don’t change with the output

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16
Q

What are variable costs

A

Costs that will change as output changes

17
Q

What is total costs?

A

Fixed costs+variable costs

18
Q

What is break even point

A

Level of output where the business will just cover its costs. If it sells more will make profit, if sells less will make loss

19
Q

What is turnover?

A

Another word for revenue

20
Q

What is cost of sales

A

The costs to make/produce a product

21
Q

What are expenses?

A

Indirect costs of an enterprise
Not associated with products they sell
Eg.
Salaries wages utility bills

22
Q

What is an asset?

A

Anything the enterprise owns

23
Q

What is gross profit

A

Profit made just by selling products. Takes into account direct costs not indirect costs

24
Q

What is net profit?

A

Amount of money left when all expenses deducted from gross profit

25
Q

What is a liability

A

Anything the enterprise owes

26
Q

What are current liabilities

A

Money that needs to be paid back in a year
Eg
Over draft
Trade credit

27
Q

What are long term liabilities

A

Loans be repaid over longer time

28
Q

What are net current assets

A

What is available for enterprise to pay for day to day expenses
Also working capital

29
Q

What are income statements

A

Tells how a business has performed financially over a period of time normally a year
Shows
How much revenue
How much of money was spent
How it was spent

Business (3 decks)

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