Finance Flashcards
Revenue expenditure
Spending on items that help to bring income in day to day
Capital expenditure
Investment into tangible and intangible assets
Capital structure objectives
Where a business gets its funding from
Debt capital
In the form of loans and debentures
Equity capital
Investment from shareholders
Profitability
How much profit a business makes per item/ customer
Net cash flow
Inflows - outflows
Sales objectives
Sales maximisation
Increase sales volume and value
More sales that competition
Cost objectives
Cost minimisation
Reduce wage cost per unit
Lower levels of waste
Reduce unit costs by moving to a cheaper place
Internal factors of finance objectives
The overall business objectives Available resources Nature of product/ service Operations HR Marketing
External influences
PESTLE
Political Economic Social Technological Legal Environmental/ ethical Market Competition Suppliers
Budgets
A detailed agreed plan of income expenses expected over a certain period of time
Benefits of budgeting
Helps with aims Priority’s Spending limits Financial support Motivation Function budgets Efficiently
promblems of budgeting
Unforeseen changes
Inflation
Lack of budgeting knowledge
Market research issues
