Brainscape's Knowledge GenomeTM

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


See full index

Business > Financial Objectives > Flashcards

Financial Objectives Flashcards

1
Q

Why are cost objectives set?

A

To minimise costs &increase profits

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

What is cash flow?

A

All the money flowing into and out of the business over a period of time

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

What’s cash inflow?

A

Receipts of cash into the business

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

What’s cash outflow?

A

Payments of cash leaving the business e.g to purchase raw materials

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

How do you calculate return on investment?

A

Return On Investment divided by Cost Of Investment X 100

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

What does return on investment measure?

A

Measures how efficient an investment is

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

What is capital expenditure?

A

The money spent to buy fixed assets e.g factories & vehicles

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

What’s capital structure?

A
  • This refers the way a business raises capital to purchase assets
  • A businesses capital structure is a combination of its debt capital (borrowed funds) and it’s money raised by selling shares
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

How do you calculate percentage change in profit?

A

The current years profit-previous years profit DIVIDED BY previous years profit X 100

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

What are the different methods of increasing profit?

A
  • increasing their prices
  • reduce cost of production
  • advertisement to increase demand
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Why are revenue objectives set?

A

To increase the value or volume of sales

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

What is gross profit?

A

The profit made once the firm’s direct costs have been paid

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

What is operating profit?

A

Profit made directly from trading

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

How do you find out the total profit for one year?

A

Operating profit+other profit-net finance costs-tax

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

What do profit margins measure?

A

The relationship between profit mad and sales revenue & tells you what % of the selling price is actually profit

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

How do you calculate gross profit margin?

A

Gross Profit Divided by Sales Revenue X100

17
Q

How do you calculate operating profit margin?

A

Operating Profit Divided by Sales revenue X 100

18
Q

How do you calculate Profit for the year margin?

A

Profit for the year Divided by Sales revenue x100

19
Q

What is a cash flow cycle?

A

THE DELAY BETWEEN MONEY GOING IN AND COMING OUT

When businesses have to pay for the cost of producing the product before they get paid

20
Q

What does the length of the cash flow cycle depend on?

A

The type of product-determines how long the product takes to be made

Credit payments-buying on credit means the goods are received but buyer has a agree period if time before payment

21
Q

What can a business do to improve cash flow?

A
  • Arrange overdrafts to allows a business to borrow money according to its needs
  • hold less stock so less cash is tied up in stock
  • sale and leaseback equipment
22
Q

What is the break even output?

A

The level of sales a business need to cover its costs

23
Q

How do you calculate break even output?

A

Fixed costs DIVIDED by contribution per unit

24
Q

How do you calculate the margin of safety?

A

Actual output - break even output

25
Q

What is the margin of safety?

A

The amount between actual output and break even

26
Q

What is profit?

A

The difference between income and total costs of a business.

27
Q

What is profitability?

A

The efficiency of a business at generating profit in relation to the size of the business.

28
Q

What are the two main ways to measure the size of a business?

A
  • Sales revenue

- Capital employed

29
Q

What’s the difference between fixed&variable costs?

A

Variable costs vary with the amount produced & fixed costs remain the same no matter how much is produced

30
Q

What’s the difference between revenue &profit?

A

Revenue is the total of all money that a company receives from selling its products whereas profit is what’s left over at the very end after costs have been taken away

31
Q

Why does business size need to be compared alongside profit?

A

So you can compare businesses

32
Q

what do profit margins show?

A

how profitable a business or product it

-what % of selling price is is actual profit

Business (9 decks)

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