Finance Flashcards
What is a cash flow forecast
A prediction of inflows and outflows of a business
Give 3 examples of internal sources of finance
- Retained profit
- Selling assets
- Owners’ funds
Give 3 examples of external sources of finance
- Bank loan
- Venture capitalist
- Government grants
How do you calculate revenue
Selling price x Number of products sold
What are fixed costs
Costs that do not vary with output
What are variable costs
Costs which vary directly with output
How do you calculate the variable costs
Variable cost per unit x Number of products sold
How do you calculate total costs
Fixed costs + Variable costs
How do you calculate profit or loss
Revenue - Total costs
What is a break even point
A business that isn’t making a loss but isn’t yet making a profit
How do you calculate break even point
Fixed costs ÷ Contribution per unit
How do you calculate the contribution per unit
Selling price - Variable cost per unit
How do you calculate the margin of safety
Actual level of sales - break even point
How do you calculate Net cash flow
Total inflows - Total outflows
Closing balance = ________ + _________
Closing balance = Net cash flow + Opening balance
