Business Term #1
Capital Expenditure
Money spent to acquire fixed assets in a business
Share Capital
Money raised from the sale of shares of a limited company
Institutions that provide banking services to low-income or unemployed individuals or groups who would other wise have no other access to financial services
Indirect Costs
Costs that are not clearly identified with the production of specific goods or services
Gross Profit
Found by deducting cost of shales from sales revenue
Revenue Expenditure
Money used in the Day-t0-day running of a business
Loan Capital
Money sources from financial institutions such as banks, with interest charged on the loan to be repaid
Business Angels
Highly affluent individuals who provide financial capital to small start-ups or entrepreneurs in return for ownership equity in their businesses
Revenue
A measure of the money generated from the sale of goods and services
Profit before Interest and Tax
The difference between gross profit and expenses
Personal Funds
A source of finance for sole traders that comes mostly from their own personal savings
Overdraft
When a lending institution allows a firm to withdraw more money than it currently has in its account
Fixed Costs
Costs that do not change with the amount of goods or services produced
Total Revenue
The total amount of money a firm receives from the sale of goods or services, found by multiplying the price per unit by the number of units sold
Profit Before Tax
Found by subtracting interest from profit before interest and tax
Retained Profit
Profit that remains after a business has paid out dividens to its shareholders
Crowdfunding
When a business venture or project is funded by a large number of people each contributing a small amount of money
Variable Costs
Costs that change with the number of goods or services produced
Profit and Loss Account
Known as the income statement, this is the record of income and expidenture flows of a business over a given time period
Profit for Period
Equal to profit before tax less tax
Sale of Assets
When a business sells off its unwanted or unused assets to raise funds
Leasing
A source of finance that allows a firm to use an asset without having to purchase with cash
Direct Costs
Costs that can be identified with the production of specific goods or services
Costs of Sales
The direct cost of producing or purchasing the goods that were sold during that period
Dividends
A sum of money paid to shareholders, which is decided by the board of directors of a company