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Business Studies > Finance Jargon > Flashcards

Finance Jargon Flashcards

1
Q

assets

A 
the property and effects of a
business, including premises,
machinery, vehicles and cash
(tangible assets) and patents, trade
marks and goodwill (intangible
assets)
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2
Q

business objectives

A 
these are established by
breaking operations into
achievable and manageable
outcomes that can be measured
and evaluated
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3
Q

efficiency

A

the ability of a business to
use its resources effectively
in ensuring financial
stability and profitability

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4
Q

financial management

A

the planning and monitoring
of the financial resources of a
business to enable it to
achieve its financial goals

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5
Q

financial resources

A

those aspects of a
business that have a
monetary or money
value

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6
Q

growth

A

the ability of a business
to increase its size in
the longer term

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7
Q

liquidity

A

the extent to which a
business can meet its
financial commitments
in the short term

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8
Q

profitability

A

the ability of a
business to maximise
its profits

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9
Q

solvency

A

the extent to which a
business can meet its
financial commitments
in the longer term

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10
Q

strategic plan

A

a statement of objectives
encompassing the
strategies that a business
will use to achieve its goals

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11
Q

strategy

A

the major tool adopted by a business to achieve its goals

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12
Q

Australian Securities

Exchange (ASX)

A

the primary stock
exchange group in
Australia

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13
Q

availability of funds

A

the ease with which a
business can access funds (for borrowing) on the
international financial
markets

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14
Q

bank overdraft

A 
a facility that allows a
business or individual to
overdraw their account up to
an agreed limit for a specified
time
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15
Q

bill of exchange

A

a document ordering
payment of a certain
amount of money at
some fixed future date

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16
Q

commercial bills

A

a type of bill of exchange
(loan) issued by nonbank
institutions

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17
Q

debentures

A

financial products issued
by a company for a fixed
rate of interest for a
fixed period of time

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18
Q

dividend

A

a distribution of the
profits of a company
to shareholders

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19
Q

equity

A 
the finance (cash)
raised by a company
by issuing shares
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20
Q

external finance

A 
funds provided by sources
outside the business,
including banks, government,
suppliers or financial
intermediaries
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21
Q

factoring

A

the selling of accounts
receivable for a
discounted price to a
finance company

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22
Q

financial decision

making

A 
a process that requires relevant
information to be identified,
collected and analysed to
determine an appropriate
course of action
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23
Q

global economic

outlook

A

the projected changes to
the level of economic
growth throughout the
world

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24
Q

interest rates

A

the cost of

borrowing money

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25
Q

internal finance

A

funds provided by the owners of the business (finance) or from the outcomes of business activities (retained earnings)

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26
Q

leasing

A 
a long-term source of borrowing
for businesses involving the
payment of money for the use
of equipment that is owned by
another party
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27
Q

mortgage

A

a loan secured by
the property of the
borrower

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28
Q

owners’ equity

A

funds contributed by
owners or partners to
establish and build the
business

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29
Q

primary markets

A

markets that deal with
the issue of debt
instruments by the
borrower of funds

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30
Q

secondary markets

A

markets that deal with
the purchase and sale of
existing securities

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31
Q

unsecured note

A

a loan for a set period of
time that is not backed
by any collateral or
assets

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32
Q

accounting equation

A 
a calculation which forms the
accounting process, showing
the relationship between
assets, liabilities and owners'
equity
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33
Q

analysis

A 
the process of working the financial
information into significant and
acceptable forms that make it more
meaningful, and highlighting
relationships between different
aspects of a business
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34
Q

assets

A

items of value owned

by a business

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35
Q

audit

A

an independent check of
the accuracy of financial
records and accounting
procedures

36
Q

balance sheet

A 
a financial document that
represents the assets and liabilities
of a business, reflecting the net
worth of the business at a
particular point in time
37
Q

budgets

A

quantitative information
(facts and figures) provided
about requirements to
achieve a particular purpose

38
Q

business activity

statement (BAS)

A

a statement that records
the claim for input tax
credits and accounts for
GST payable for a business

39
Q

capital expenditure

A

what is spent on the
non-current or fixed
assets of a business

40
Q

cash flow statement

A

a financial document that

indicates the movement of cash receipts and cash payments resulting from transactions over a period of time

41
Q

current assets

A

assets that can be
turned into cash
within 12 months

42
Q

current liabilities

A

debts that must be
repaid within 12
months

43
Q

debt finance

A

the short-term and longterm
borrowing from
external sources by a
business

44
Q

debt repayments

A

money owed either to
the business or by the
business

45
Q

equity finance

A

the internal sources of
finance in the
business

46
Q

financial budgets

A

relating to financial data of a
business, including the
budgeted income statement,
balance sheet and cash flows

47
Q

financial controls

A

the policies and procedures
that ensure that the plans of
a business will be achieved in
the most efficient way

48
Q

financial risk

A

the risk to a business of
being unable to cover
its financial obligations

49
Q

gearing

A 
the proportion of debt
(external finance) and the
proportion of equity (internal
finance) used to finance a
business
50
Q

income statement

A

a financial document that shows the operating results for a period, including revenue earned and expenses incurred with the resultant profit or loss

51
Q

interpretation

A

the making of
judgements and
decisions using the data
gathered from analysis

52
Q

liabilities

A

claims by people against
the assets (items of
debt), representing what
is owed by the business

53
Q

non-current assets

A

assets that are not
expected to be turned
into cash within 12
months

54
Q

non-current liabilities

A

debts that must be
met some time after
the next 12 months

55
Q

operating budgets

A

budgets relating to the main
activities of a business such as sales, production, raw materials, labour, expenses
and costs

56
Q

owners’ equity

A

the owners’ financial interest
in the business or net worth
of the business (also referred
to as “capital”)

57
Q

planning process

A

the setting of goals, determining strategies, identifying and evaluating alternative courses of action and choosing the best
alternative for the business

58
Q

project budgets

A

budgets relating to
capital expenditure and
research and
development

59
Q

record systems

A

the mechanisms employed by a business to ensure that data is kept and the information provided is accurate, reliable, efficient and accessible

60
Q

appreciation

A

an upward movement of
a currency against
another currency

61
Q

cash flow

A

the movement of cash in
and out of a business
over a period of time

62
Q

clean payment

A

a situation in which payment
is sent to, but not received
by, the exporter before the
goods are transported

63
Q

cost centres

A

the particular areas,
departments or sections of
a business to which costs
can be directly attributed

64
Q

credit risk

A

the risk of another party
failing to complete a
transaction as agreed

65
Q

currency swap

A 
an agreement to exchange
one currency in the spot
market with an agreement to
reverse the transaction in the
future
66
Q

current assets

A

assets that can be
turned into cash
within 12 months

67
Q

current liabilities

A

debts that must be repaid
within 12 months, usually
including overdraft and
accounts payable

68
Q

derivatives

A

simple financial instruments
that may be used to lessen
exporting risks associated
with currency fluctuations

69
Q

direct costs

A

costs that can be
allocated to a particular
product (also known as
variable costs)

70
Q

foreign exchange

market (forex)

A

a market that
determines the price of
one currency relative to
another

71
Q

foreign exchange

rate

A

the ratio of one

currency to another

72
Q

forward exchange

contract

A

an agreement to exchange one currency for another at a certain exchange rate on a future date, usually after 30, 60, 90 or 180 days

73
Q

hedging

A

the process of
minimising the risk of
currency fluctuations

74
Q

indirect costs

A

costs that are shared
by more than one
product

75
Q

letter of credit

A

a commitment by the importer’s bank, which promises to pay a specified amount when the documents proving shipment of the goods are presented

76
Q

net working capital

A

the difference between current assets and current liabilities, representing funds needed for the day-to-day operations of a business

77
Q

option

A

a financial instrument that gives the buyer the right, but not the obligation, to buy or sell foreign currency some time in the future

78
Q

payables

A

sums of money owed by the
business to other businesses
from whom it has purchased
goods or services

79
Q

payment in advance

A

a method that allows the
exporter to receive
payment and then arrange
for the goods to be sent

80
Q

profitability

management

A

the control of both the
costs and revenues of a
business

81
Q

receivables

A

sums of money due to a
business from customers to
whom it has supplied goods
or services

82
Q

sale and lease-back

A

the selling of an owned
asset to a lessor and
leasing the asset back
through fixed payments

83
Q

spot exchange rate

A

the value of one
currency in terms of
another currency on a
particular day

84
Q

working capital

A

the funds available for
the short-term
commitments of a
business

85
Q

working capital

management

A 
the process of determining the
best mix of current assets and
current liabilities needed to
achieve the objectives of the
business

Business Studies (5 decks)

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