Topic 1.3 - Putting a business idea into practice Flashcards
1
Q
profit maximization
A
is objective of a business which can be achieved by maximizing the positive difference between the business sales revenue and costs
2
Q
4 financial aims and objectives
A
- survival
- profit
- market share
- financial security
3
Q
5 non financial aim and objective
A
- social objectives
- personal satisfaction
- challenge
- independence
- control
4
Q
margin of safety
A
how much sales can fall before the business reaches break even again or starts making a loss
5
Q
two uses of break even analysis
A
- helps a business see if a - - product is viable
- helps make decisions about pricing
6
Q
why is cash important to businesses
A
to pay suppliers, overheads, employees
to prevent business failure
7
Q
5 areas of cash flow forecast
A
cash inflows
cash outflows
net cash flow
opening balance
closing balance
8
Q
2 example of cash inflows
A
sales
bank loan
9
Q
2 examples of cash outflows
A
salaries
materials
rent
