T1.3 - Putting a business idea into practice Flashcards
Financial aims and objectives? x5
-survival
-maximum profit
-maximum sales
-increase market share
-achieve financial security
Non-financial aims and objectives? x4
-social objectives
-personal satisfaction
-challenge
-independence and control
Factors that affect aims and objectives of a business? x3
-size and age of business
-owner of business
-level of competition
formula for revenue?
quantity sold x price = revenue
Formula for total variable cost?
quantity sold x variable cost per unit = total variable cost
Formula for total cost?
total variable costs + total fixed costs = total cost
formula for profit?
revenue - cost = profit
formula for interest?
interest = total repayment - borrowed money/borrowed money x 100
Formula for break even point in units?
break even = fixed costs/sales price - variable cost per unit
formula for break even point in revenue?
break even point = break even point in units x sales price
Formula for margin of safety?
margin of safety = actual sales - break even sales
What does a business need cash to pay for ? x3
-employee
-suppliers
-overhead
Formula for net cash flow?
Net cash flow = cash inflows - cash outflows for given time
formula for closing balance?
Closing balance = opening balance + net cash flow
What is closing balance?
bank balance at end of month
