Unit 3: Financial Flashcards

1
Q

capital expenditure

A

spending on a company’s fixed assets

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2
Q

fixed asset

A

asset kept for over 1 year

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3
Q

examples of capital expenditure

A

factories, tech, production equipment and vehicles

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4
Q

revenue expenditure

A

spending on a company’s general operational costs

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5
Q

examples of revenue expenditure

A

utility bills, wages, paying suppliers, repaying debt, taxes

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6
Q

3 types of internal sources of finance

A

personal funds
retained profit
sale of assets

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7
Q

sale of assets

A

selling its (fixed) assets

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8
Q

personal funds

A

owner investing own money

risky

receive shares in return

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9
Q

retained profit

A

money company has left at end of trading period

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10
Q

short term finance

A

repaid within 12 months

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11
Q

medium term finance

A

repaid within 1 and 5 years

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12
Q

long term finance

A

repaid in over 5 years

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13
Q

3 types of external sources of finance

A

equity finance
debt finance
others

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14
Q

equity finance

A

outside investor receives part ownership (shares) in exchange for finance

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15
Q

3 types of equity finance

A

business angel
venture capital
share capital

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16
Q

business angel

A

successful business person who invests their money into new businesses

17
Q

venture capital

A

financing that pools resources from a group of investors to fund a new project/company

18
Q

share capital

A

money raised through selling shares in stock market

19
Q

debt finance

A

money borrowed from a bank or another financial institution

20
Q

types of debt finance

A

overdraft, loan capital, microfinance, trade credit

21
Q

loan capital

A

business receives a loan and offers collateral

22
Q

overdrafts

A

business can loan/ take out more than what they have in the bank

23
Q

microfinance

A

providing financing to people with very limited income and assets, who aren’t able to get services from traditional banks

24
Q

microcredit

A

small loans that enable someone to start and continue a small business

25
trade credit
business receives goods/services from a supplier immediately, but pays for them later (no interest)
26
examples of other forms of finance
leasing and crowdfunding,
27
leasing
renting a fixed asset over a period of time, instead of buying it
28
crowdfunding
many people invest small amount of money to fund a business/project
29
variable costs
costs that vary directly with output
30
direct cost
cost traceable to a product, service or department
31
indirect cost
cost that can't be traced to a specific product, service or department
32
revenue stream
one specific way a company generates income
33
order of profit and loss statement
revenue cost of sales gross profit expenses profit before interest or tax interest profit before tax tax profit for the period dividends retained profit
34
order of balance sheet
non-current assets [...] -- non-current assets current assets [...] -- current assets total assets current liabilities [...] -- current liabilities non-current assets [...] -- non-current assets total liabilities net assets equity - share capital - retained profit total equity
35
intangible assets examples
patents copyright registered trademark goodwill