Theme 2 Flashcards
1
Q
Overdraft
A
A= quick and easy. D= debt can increase rapidly
2
Q
Bank Loans
A
A= no additional fees D= assets at risk
3
Q
Trade Credit
A
A= allows the business to potentially sell the products. D= may loose supplier if they don't pay the bill in time.
4
Q
Share Capital
A
A= does not cost the business. D= owners share reduces every time new investment is received.
5
Q
Venture Capital
A
A= available for businesses which banks have deemed too risky to loan money too. D= larger percentages often given away to secure investment due to the increased risk.
6
Q
Crowd Funding
A
A= reach wider audience. D= contributions not guaranteed.
7
Q
Leasing
A
A= only pay a small sum, funds can be used for other business needs. D= don't own the asset, so have to keep paying.
8
Q
Grant
A
A= does not usually have to be paid back. D= difficult to obtain as many businesses are competing.
9
Q
Cash Flow Forecasting
A
A= can gain finance such as overdraft to cover short fall.
can help compare actual revenue, costs, profit and helps find solutions and problems to why the forecast could be low.
D= not always reliable, assumptions.
there may be unexpected costs in distribution or production.
10
Q
Break Even Calculation
A
Fixed costs/contribution per unit
11
Q
Contribution Calculation
A
selling price-variable cost per unit
12
Q
Total Contribution Calculation
A
total sales x contribution per unit
13
Q
Margin of Safety Calculation
A
number of output/sales-break even point
14
Q
Net Profit Calculation
A
Operating profit-interest
15
Q
Job Production
A
A= high quality. D= usually expensive raw materials.
