Glossary Flashcards
What is meant by a business “selling assets”?
A business sells assets to raise cash
What is meant by “retained profit”?
Profit that a business has saved while in operation
What is meant by an owner’s “personal savings”?
Money that is invested into a business from the owner’s own cash
What is meant by selling “share capital”?
A business can sell a percentage of share capital for financial investment into the business
What is meant by a “government grant”?
Government money given for research or operation
What is meant by a “loan”?
Money borrowed from an individual or bank in the short-term, which must be paid back with interest
What is meant by a “hire purchase”?
Where a business buys something in installments
What is meant by a “mortgage”?
A long-term loan which is secured against an asset, which must be paid back with interest
What is meant by “trade credit”?
When a business can buy something, but pay a supplier at a later date
What is meant when a business uses “debt factoring”?
A business sells their debt to a third-party for cash, with a fee
What is meant by “venture capital”?
Where a venture capitalist provides a business with cash to support business growth, often taking some control in the process
What is meant by an “overdraft”?
A short-term loan offered by banks to allow a business to borrow a limited amount agreed in advance, paid back with interest
What is meant by “crowdfunding”?
Where a business raises finance by allowing people to donate to a project/venture
What is meant by a “business angel”?
An affluent and experienced individual who provides funding for a business, in exchange for some ownership
What is meant by “revenue”?
Income earned by a business through sales of goods and services
What is meant by a “cost”?
An expense that a business incurs
What is meant by a “fixed cost”?
A cost a business incurs that doesn’t vary as a result of output
What is meant by a “variable cost”?
A cost a business incurs that changes directly with output
What is meant by “cash”?
Money that a business can spend immediately
What is meant by “cash flow”?
Money coming in and out of a business, along with the timings of these cash transfers
What is meant by “cash inflows”?
Cash coming into a business
What is meant by “cash outflows”?
Cash going out of a business
What is meant by an “opening balance”?
The amount of cash a business starts trade with
What is meant by a “closing balance”?
The amount of cash a business finishes trade with
