Finance Flashcards
What is gross profit?
Gross profit is the amount of extra money made from sales. To work out profit it is the difference between the Sales and the costs (overheads)
What is a balance sheet?
A financial report that summarises a company’s assets (what it owns), liabilities (what it owes) and owners equity at a given time.
What are the overheads?
Overheads are
What is the market share and how do you calculate it?
Market share is the amount of a market a business attracts. The way it is calculated is by the percentage of sales/ units.
What is quantitative data and how is it useful?
Quantitative data is Non subjective data. It uses mathematical answers to find out patterns and predict oncoming patterns.
What is qualitative data and how is this useful?
Qualitative data is subjective data. It can be worded data that can be used subjectively to improve your organisation. E.g a customer survey with a suggestions option to improve the organisation.
What is Accurate Budget Forecasting?
Accurate Budget Forecasting is a way of reducing unnecessary spending, and unnecessary staffing. In addition forecasting allows us to think of contingency plans so thinking of unforseen events and planning budgets in case things might happen. Also further production management can improve your company because forecasting your product needs can improve your production needs. E.g materials, labour and shipping requirements.
What are Cash Flows?
The revenue or expenses expected to be generated through business activities (sales, manufacturing etc.) over a period of time. Having a positive cash flow is important for businesses to survive in the long run.
What are Assets?
What are Profit and Loss statements?
A financial statement that is used to summarise a company’s performance and financial position by reviewing revenues, costs and expenses during a specfic period of time such as quarterly or annually.
What are Fixed Costs?
Fixed costs do not vary in relation to sales.
What are Variable Costs?
Variable costs are costs directly affected by sales. For example the use of napkins or linen. Mostly food costs.
What are Semi-variable costs?
WHen some are fixed costs or some are not. For instance Labour is an example of semi-variable costs?
KPIs what are they?
Key performance indicators are performance indicators that allow companies to monitor and evaluate their growth. E.g Sales are a KPI because they would want to see more growth each year and but just from inflation of costs and prices but through more sales driven. Thus they might want to market more in quieter times.
Breakeven point what is it?
A breakeven point is the definition of when sales income equals the cost for labour, overheads and food then the breakeven point has been reached.
