powell test Flashcards
financial objective
a goal or target pursued by the finance function within an organisation
profit
the surplus of total revenue over total costs for a business over a trading period
cash flow
the movement of cash into and out of a business over a period of time
gross profit
income received from sales minus the cost of goods and services sold
operating profit
the financial surplus arising from a business’s normal trading activities and before taxation
profit per year
a measure of a business’s profits that takes into account a wider range of expenditures and incomes including taxation
revenues
are the earnings or income generated by a firm as a result of its trading activities
capital expenditure
spending undertaken by businesses to purchase non-current assets such as vehicles and property. It is another term for investment.
capital structure
refers to the way in which a business has raised the capital it requires to purchase its assets
budgets
financial plans that forecast revenue from sales and expected costs over a time period
variance analysis
the process of investigating any differences between forecast data and actual figures
cash flow
the movement of cash into and out of a business over a period of time
cash flow forecast
state the inflows and outflows of cash that the managers of a business expect over some future period
trade credit
offered when purchasers are allowed a period of time (frequently 30, 60 or 90 days) to pay for products they have bought
break even output
that level of output or production at which total costs exactly equal revenue from sales.
contribution
the difference between revenue and variable costs.
margin of safety
measures the amount by which a business’s current level of output exceeds break-even output
profitability
a measure of financial performance that compares a business’s profits to some other factors such as revenue.
profit margin
a ratio that expresses a business’s profit as a percentage of its revenue over some trading period
bank loan
an amount of money provided to a business for a stated purpose in return for a payment in the form of interest charges
over draft
when a business is allowed to spend more than it holds in its current bank account up to an agreed limit
venture capital
funds advanced to businesses thought to be relatively high risk in the form of share and loan capital.
share capital
finance invested into a company as a result of the sale of shares in the business.
mortgages
ong-term loans, repaid over periods of up to fifty years, and used to purchase property
opportunity costs
the best alternative foregone as a result of a decision.
