raising finance key words and ideas Flashcards
finance
provides the numbers that help managers make better decisions and count what is happening and what has happened
fixed costs
dont change with output
variable costs
change with output
working capital
the finance available for the day to day running of the business
sources of finance
where the money comes from
angel investors
investors who back a business before it has opened its doors, taking all equity risks
collateral
an asset that acts as security for a loan, the lender can sell it if the borrower fails to pay back the loan
crowdfunding
obtaining external finance from many individual small investments, usually through a web based appeal
public limited company
a company with limited liability and shares, which are available to the public, its shares can be quoted on the stock market
seedcorn capital
the early stage finance that might come from an angel investor
share capital
business finance that has no guarantee of repayment or annual income, but gains a share of the business and its potential profits
stock market
a market for buying and selling company shares, it supervises the issuing of shares by companies, it is also a second hand market for stocks and shares
venture capital
high-risk capital invested in a combination of loans and shares, usually in small, dynamic businesses
bankrupt
when a business is unable to meet personal liabilities, some or all of which can be a consequence of business activities
creditors
those owed money by a business
limited liability
owners are not liable for the debts of the business, they can lose no more than the amount they invested
sole trader
a one-person business with unlimited liability
unlimited liability
owners are liable for any debts incurred by the business
cash flow
the flow of money into and out of a business over a certain time period
business plan
a document setting out a business idea, how it can be financed, marketed and out into practice
cashflow forecast
estimating future monthly cash inflows and outflows in order to work out its net cash flow
just in time
ordering stock so it arrives just as it is needed
over draft
short term borrowing from a bank, the business only borrows as much as it needs to carver the daily cash short fall
