Exam Flashcards
(29 cards)
What is ARR?
Average rate of return on an investment
What is capital
A firms wealth in the form of money or other assets
What is capital employed
The total money put into a business
What is credit?
An agreement that a customer will pay for something at a later date
What is a current asset
An asset that doesn’t last long ( cash)
What is a fixed asset?
A long term asset: property, equipment, land
What is gross profit margin
Fraction of every pound spend by customers that doesn’t go towards making the product
What is limited liability?
Owners of a business not responsible for all the debt
What is margin of safety
Gap between current levels of output and the break even output
What is net profit?
Profit left when all costs are taken into account
What is net profit margin?
Fraction of every pound spent by customers that the business keeps
What is revenue
Income earned by a business in a given time period
What is working capital?
Money available for day to day operating of a business.
What is output?
Amount of goods or services a business produces
What are fixed costs
Costs that don’t change with the output
What are variable costs
Costs that will change as output changes
What is total costs?
Fixed costs+variable costs
What is break even point
Level of output where the business will just cover its costs. If it sells more will make profit, if sells less will make loss
What is turnover?
Another word for revenue
What is cost of sales
The costs to make/produce a product
What are expenses?
Indirect costs of an enterprise
Not associated with products they sell
Eg.
Salaries wages utility bills
What is an asset?
Anything the enterprise owns
What is gross profit
Profit made just by selling products. Takes into account direct costs not indirect costs
What is net profit?
Amount of money left when all expenses deducted from gross profit
