Theme 2 A-Level Business Flashcards
What are the three types of internal finacnce?
Sale of assets, Retained profit, owners capital
What are the three types of External finance?
Venture capital, Bank loan, Grants
What is Unlimited liability?
When the owner is responsible for all debts of the business
What is limited liability?
When the owner is only responsible for the money invested into the business
What is a sole trader?
When one person owns and controls a business
What is a Partnership?
When 2-20 people set up a business
What is risk
It is the possibility of a negative outcome in the hope of a positive income
What is a cash flow forecast?
It is a prediction of a businesses finance to make sure that they have enough cash for the future
What is the calculation for net cash flow?
Inflows-Outflows
What is the calculation for closing balance
Net cash flow-Opening Balance
What is an overdraft?
An extra allowance in your bank account
What is cash flow?
the way that cash goes in and out of a business
What is cash?
The physical money a business has to spend
What is sales volume?
The number of goods or services that a business has sold
What is the calculation for sales volume?
Sales revenue/price
What is revenue?
The money made from sales
What is the calculation for revenue?
Quantity sold x Price
What are variable costs?
Costs that change with output
What are Fixed costs?
Costs that do not change with output
What is the calculation for Profit?
Total Revenue-Total costs
What is the calculation for Gross profit margin?
Gross profit/Revenuex100
What is the calculation for Operating Profit Margin?
Operating profit/Revenuex100
What is the calculation for operating profit?
Gross profit-Operating costs
What is the calculation for gross profit?
Revenue-cost of sales
What is cost of sales?
Any direct costs involved with selling the product
What is Buffer stocks
The stock used just in case of an increase in demand
What is Kanban?
A card or an object that acts as a signal to move or provide resources in a factory
What are lead times?
The amount of time it takes from stock being ordered to when it is ready for use
What is re-order levels
The level of stock when a new order is placed
What are re-order quantities?
The amount of resource that is ordered in
What is stock rotation?
The flow of stock ion and out of storage
What is Work in progress?
Partly finished products
