Financial Analysis/ Operations Flashcards
What are the different types of budgets in business?
Operating Budget: Forecasts revenue and expenses for day-to-day operations.
Cash Flow Budget: Tracks cash coming in and out of the business.
Capital Budget: Plans for major expenses or investments in long-term assets.
Zero-Based Budget: Starts from zero, with each expense justified for the new period.
How do you calculate business profit?
Profit = Revenue - Expenses
Gross Profit = Sales Revenue - Cost of Goods Sold (COGS)
Net Profit = Gross Profit - Operating Expenses - Taxes
How do you calculate sales tax?
Sales Tax = Price of Goods x Sales Tax Rate
Example: If a product costs $100 and the sales tax rate is 8%, Sales Tax = 100 x 0.08 = $8
Why is it important to maintain financial records?
Ensures accurate tax reporting
Helps monitor cash flow and business performance
Assists in decision-making for investments and budgeting
Provides transparency for stakeholders
What are the methods for maintaining financial records?
Manual Records: Handwritten or typed ledgers (used less often now).
Accounting Software: Tools like QuickBooks or Xero for automated record-keeping.
Cloud-based Systems: Using online software to store and manage records securely.
What are the two different types of Bookkeeping?
Single-entry Bookkeeping: Records each transaction only once (e.g., cash book).
Double-entry Bookkeeping: Each transaction is recorded in two accounts (debits and credits).
Why are accounting standards and principles important?
They ensure consistency and comparability of financial statements.
They provide transparency for investors and stakeholders.
They help businesses comply with laws and regulations.
How should a business use credit responsibly?
Avoid excessive debt by ensuring repayments are manageable.
Monitor cash flow to ensure there are enough funds to meet obligations.
Maintain a good credit score to access favorable lending terms.
What is included on a balance sheet and what is its purpose?
Assets: What the business owns (e.g., cash, inventory).
Liabilities: What the business owes (e.g., loans, accounts payable).
Equity: Owner’s share in the business (Assets - Liabilities).
Purpose: Shows financial health, providing insights into the business’s net worth.
Why is an income statement important to a business?
Shows Revenue, Expenses, and Profit/Loss over a specific period.
Helps business owners and investors track financial performance.
Important for decision-making on pricing, cost control, and overall strategy.
How can you help employees use equipment and machinery safely?
Provide training on proper use.
Create clear instruction manuals.
Regularly inspect equipment to ensure it is functioning correctly.
Use safety gear when necessary.
Why is it important for employees to follow instructions on the job?
Ensures safety and reduces the risk of injury.
Maintains consistency in work processes.
Prevents errors that can lead to financial loss.
What is the purpose of health and safety regulations?
To protect employees from harm or injury.
To comply with government regulations.
To create a safe working environment, increasing productivity.
What are common security methods for loss prevention?
Surveillance cameras.
Employee training on identifying suspicious activity.
Inventory tracking systems to monitor stock levels.
Locking systems and secure storage areas.
What are the steps to properly open and close a cash drawer/register?
Opening: Count the cash and record starting balance.
Closing: Count the cash, match it against the sales record, and report discrepancies if any.
