finance

Question 0

What are the befits of a loan?

Answer 0

Quick money

Can be repaid over a long time

Question 1

What is a a loan?

Answer 1

a loan is a borrowed amount of money from the bank

Question 2

What are the costs of a loan?

Answer 2

Interest has to be paid

Question 3

What is commercial mortgage?

Answer 3

A very large amount of money borrowed from the bank

Question 4

What are the benefits of commercial mortgage?

Answer 4

Paid over a long period of time like 25 years
Quick money
Interest rate is low

Question 5

Commercial mortgage costs are?

Answer 5

Interest has to be pain

Can lose property If you don’t pay back

Question 6

What is leasing?

Answer 6

Renting something out

Question 7

Benefits do leasing are?

Answer 7

Don’t have to pay a large amount of money

The thing you leased is replaced if Broken

Question 8

What are the costs of leasing?

Answer 8

It can be more expensive that buying

You never own the asset

Question 9

What is selling shares?

Answer 9

This is when the business sells apart of there business to shareholders only public limited company’s can do this and private limited company’s can do this

Question 10

What are the benefits of selling shares?

Answer 10

Large amount of money can be raised
Don’t have to pay back ant money
No interest at all

Question 11

What are the costs of selling shares?

Answer 11

Shareholders have a day on how you run your business

Question 12

Hire purchase is?

Answer 12

When you pay a deposit for the asset you are buying and pay them monthly payments until it is fully paid

Question 13

Advantages of hire purchase is?

Answer 13

The money does not need to be lid ASAP

Question 14

Disadvantages of hire purchase is?

Answer 14

The company still own the asset until you have finally paid it off
More expensive as you have added interest

Question 15

What is a grant?

Answer 15

This is money given to public limited company’s it is money given to them but the government

Question 16

What is advantages of grants?

Answer 16

Do not have to pay it back

Question 17

Disadvantages of grants are?

Answer 17

Only given to companies who can help a depressed area to get employment

Question 18

What is retained profits?

Answer 18

Using money from previous years of profit that has not been spent

Question 19

Advantages of retained profits are?

Answer 19

Doesn’t have to be paid back

Question 20

Disadvantages of retained profits?

Answer 20

The money could be used for better things

Question 21

Government funding is?

Answer 21

When the government helps your business finance

Question 22

Advantages of government funding is?

Answer 22

Money doesn’t have to be repaid

Question 23

Disadvantages of government funding?

Answer 23

Must stick to budget

Money had to be spent on what the government says

Question 24

Owners savings?

Answer 24

This is the owners personal money spent to help the business

Question 25

Advantages of owners saving is?

Answer 25

No loss of control

Question 26

Disadvantages do owners savings?

Answer 26

Owners personal money is lost

Question 27

How do you calculate the profit?

Answer 27

Sales - expenses

Question 28

What is the break even point

Answer 28

Total costs = total revenue

Question 29

What is fixed costs

Answer 29

Costs that do not change on the level of input or how many units are sold or made

Question 30

What is variable costs?

Answer 30

Costs that change depending on how many units of product is made

Question 31

How do you calculate revenue?

Answer 31

Selling price x units sold

Question 32

How do you calculate the break even point?

Answer 32

Total costs = total revenue

Question 33

What is revenue?

Answer 33

The name given to money that a business receives through selling a product

Question 34

How can poor cash flow occur?

Answer 34

Spending to much money on raw materials
giving customers too long to pay back
Not receiving enough money from sales

Question 35

How to improve cash flow?

Answer 35

Look for cheaper suppliers
Chase up customers to claim the money they own your business and offer discounts
Selling equipment or assets that are no longer needed within the business

Question 36

What is a cash budget?

Answer 36

Is a document that is prepared to help manage cash flow, it contains receipts and payments made by the business it allows the business to make financial decisions

Question 37

What are the benefits of preparing a cash budget?

Answer 37

To show if the business is in surplus or deficit
Will show id additional finance is needed
It can help make financial decisions within the business

Question 38

What is gross profit?

Answer 38

The profit from selling and buying

Question 39

What is net profit?

Answer 39

The profit after adding other income and subtracting expenses

Question 40

Technology is finance?

Answer 40

Microsoft exel

Prepare cash budgets
Calculate profit
Create graphs to show income and expenditure

Question 41

What is the difference between gross and net profit?

Answer 41

Gross profit is all the profit from buying and selling and net profit is when added income is added and expenses are deducted

Question 42

What could a partnership do to raise finance?

Answer 42

Increase the number of partners within the business, this means that more finance is flowing into the business new skills and knowledge is coming into the business, however this can increases the risk of disagreements occurring and profits being distributed among more people