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Business > Key terms 2.1-Raising Finance > Flashcards

Key terms 2.1-Raising Finance Flashcards

1
Q

what is the definition of capital?

A

the money provided by the owner in a business

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2
Q

what is the definition of capital expenditure?

A

spending on business resources that can be used repeatedly over a period of time

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3
Q

what is the definition of internal finance?

A

money generated by the business or its current owners

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4
Q

what is the definition of retained profit?

A

profit after tax that is ‘ploughed’ back into the business

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5
Q

what is the definition of revenue expenditure?

A

spending on business resources that have already been consumed or will be very shortly

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6
Q

what is the definition of sale and leaseback?

A

the practice of selling assets such as property or machinery and leasing them back from the buyer

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7
Q

what is the definition of authorised share capital?

A

the maximum amount that can be legally raised

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8
Q

what is the definition of bank overdraft?

A

an agreement between a business and a bank that means a business can spend more money than it has in its account. the overdraft limit is agreed and interest is only charged when the business goes overdrawn

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9
Q

what is the definition of capital gain?

A

the profit made from selling a share for more than it was bought

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10
Q

what is the definition of crowdfunding?

A

where a large number of individuals invest in a business or project on the internet avoiding the use of a bank

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11
Q

what is the definition of debenture?

A

a long term loan to a business

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12
Q

what is the definition of external finance?

A

money raised from outside the business

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13
Q

what is the definition of issued share capital?

A

amount of current share capital arising from the sale of shares

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14
Q

what is the definition of lease?

A

a contract to acquire the use of resources such as property or equipment

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15
Q

what is the definition of peer to peer lending?

A

where individuals lend to other individuals without prior knowledge of them on the internet

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16
Q

what is the definition of permanent capital?

A

share capital that is never repaid by the company

17
Q

what is the definition of equities?

A

another name for an ordinary share

18
Q

what is the definition of secured loans?

A

a loan where the lender requires security such as property to provide protection in case the bower defaults

19
Q

what is the definition of share capital?

A

money introduced into the business through the sale of shares

20
Q

what is the definition of unsecured loans?

A

where the lender has no protection if the borrower fails to repay the money owed

21
Q

what is the definition of venture capitalism?

A

providers of funds for small or medium-sized companies that may be considered too risky for other investors

22
Q

what is the definition of collateral?

A

an asset that might be sold to pay a lender when a loan cannot be repaid

23
Q

what is the definition of incorporated business?

A

a business model in which the business and the owner/s have seperate legal identities

24
Q

what is the definition of limited liability?

A

a legal status that means shareholders can only lose the original amount they invested in the business

25
Q

what is the definition of long-term finance?

A

money borrowed for more than 1 year

26
Q

what is the definition of rights issue?

A

issuing new shared to existing shareholders at a discount

27
Q

what is the definition of short-term borrowing?

A

money borrowed for 12 months or less

28
Q

what is the definition of undercapitalised?

A

a business not raising enough capital when setting up

29
Q

what is the definition of unincorporated business?

A

a business model in which ts no legal difference between the owner/s and the business

30
Q

what is the definition of unlimited liability?

A

a legal status which means that business owners are liable for all business debts

31
Q

what is the definition of business plan?

A

a plan for the development of a business giving details such as the products to be made, resources needed, and forecasts such as costs, revenues and cash flows

32
Q

what is the definition of cash-flow forecast?

A

the prediction of all expected receipts and expenses of a business over a future time period which shows the expected cash balance at the end of each month

33
Q

what is the definition of cash inflows?

A

the flow of money into a business

34
Q

what is the definition of cash outflows?

A

the flow of money out of a business

35
Q

what is the definition of net cash flow?

A

difference between the cash flowing in and the cash flowing out of the business in a given time period

36
Q

what is the definition of solvency?

A

the degree to which a business meets its debts when they fall due

Business (22 decks)

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