Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business > Finance > Flashcards

Finance Flashcards

1
Q

What is the formula for the Break Even Point?

A

fixed costs/contribution per unit.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is the formula for Contribution Per Unit?

A

total revenue - total variable costs.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Name 1 reason why a firm needs finance to start up a business?

A

to pay for the premises and have enough money to pay for staff and later have enough to expand.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is an internal source of finance?

A

They are funds that are found inside the business.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Give an example of an Internal source of finance?

A

Selling assets.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is an external source of finance?

A

The are funds found outside the business.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Give an example of an external source of finance?

A

Creditors.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Give 3 examples of short term sources of external finance?

A

Overdraft, Trade Credits and Factoring.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Give 3 examples of long term sources of internal finance?

A

Loans, Grants and Leasing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is a creditor?

A

An individual or business that has lent funds to a business and is owed money.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is a debtor?

A

An individual or business who has borrowed funds from a business and so owes it money.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is the financial objectives?

A

Targets expressed in money terms such as making a profit, earning income or building wealth.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What does S M A R T stand for?

A

Specific, measurable, achievable, realistic and timed.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What does Revenues, Sales Revenue, Turnover, Sales Turnover mean?

A

The amount of income received from selling goods or services over a period of time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Whats the total revenue formula?

A

TR = P x Q

Total Revenue = Price x Quantity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is Sales Volume?

A

The number of items or products or services sold by a business over a period of time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are a businesses fixed cost?

A

Costs which do not vary with the output produced such as rent, business rates, advertising costs, administration costs and salaries.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What are total costs?

A

All the costs of a business; it is equal to fixed costs plus variable costs.

19
Q

What is the total cost formula?

A

TC = FC + VC

Total Costs = Fixed Costs + Variable Costs

20
Q

What are variable costs?

A

Costs which change directly with the number of products made by a business such as the cost of buying raw materials.

21
Q

What is the definition of profit?

A

Occurs when the revenues of a business are greater than its costs over a period of time.
TR - TC = P

22
Q

What is cash flow? and define the inflows and outflows

A

The cash flow is the flow of cash into and out of a business. Inflows are the cash flowing into a business, its receipts. The outflows are The cash flowing out of a business, its payments

23
Q

What is the Net Cash Flow formula?

A

The receipts of a business minus its payments

Inflows – Outflows = Net Cash Flow

24
Q

Whats insolvency?

A

When a business can no longer pay its debts

25
Q

Whats a Cash Flow Forecast?

A

A prediction of how cash will flow through a business in a period of time in future.

26
Q

what is the Opening Balance?

A

The amount of money in a business at the start of the month.

27
Q

What is Closing Balance?

A

The amount of money in a business at the end of the month.

28
Q

What is Trade Credit?

A

Where a supplier gives a customer a period of time to pay a bill (or invoice) for goods or services once they have been delivered.

29
Q

What is Stocks?

A

Materials that a business holds. Some could be materials waiting to be used in the production process and some could be finished stock waiting to be delivered to customers.

30
Q

Whats the definition of long term finance?

A

Sources of money for businesses that are borrowed or invested typically for more than a year e.g Mortgage, Venture Capitalist.

31
Q

Whats the definition of short term finance?

A

Sources of money for businesses that may have to be repaid with immediately or fairly quickly, such as an overdraft, usually within a year.

32
Q

What is the definition of personal savings?

A

Money that has been set aside and not spent by individuals and households.

33
Q

Whats Share Capital?

A

The amount of money invested into the business by shareholders.

34
Q

Define Shareholders?

A

The owners of a company.

35
Q

Whats a venture capitalist?

A

An individual or company which buys shares in what they hope will be a fast growing company with a long term view of selling the shares at a profit.

36
Q

What is a loan?

A

Borrowing a sum of money which has to be repaid with interest over a period of time, such as 1-5 years.

37
Q

What is security or Collateral?

A

Assets owned by a business which are used to guarantee repayments of a loan; if the business fails to pay off the loan, the lender can sell what has been offered as security.

38
Q

Whats a mortgage?

A

A loan where property is used as security.

39
Q

What is a Dividend?

A

A share of the profits of a company received by shareholders who own shares.

40
Q

Define Retained Profit?

A

Profit which is kept back in the business and used to pay for investment in the business.

41
Q

What is leasing?

A

Renting equipment or premises.

42
Q

What is an overdraft facility?

A

Borrowing money from a bank by drawing more money than is actually in a current account. Interest is charged on the amount overdrawn.

43
Q

What is Factoring?

A

A source of finance where a business is able to receive cash immediately for the invoices it has issued from a factor, such as a bank, instead of waiting the typical 30 days to be paid.

Business (7 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions