terms + definitions unit 5 Flashcards
financial objective
goal or target pursued by the finance function within an organisation
profit
surplus of total revenue over total costs for a business over a trading period
cash flow
the movement of cash in and out of a business over a period of time
gross profit
income received from sales minus the costs of goods and services sold
operating profits
financial surplus arising from a business’s normal trading activities and before taxation
profit for the year
a measure of a business’s profits that take into account a wider range of expenditures and incomes including taxation
revenues
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
process of investigating any differences between forecast data and actual figures
cash flow forecast
sate the inflows and outflows of cash that the managers of a business expect over some future period
tarde credit
offered when purchases are allowed a period of time (30,60,90 days) to pay for products they have bought
break-even output
that level of output or production ate high total costs exactly equal revenue from sales
contribution
difference between revenue and variable costs
