Definitions 1
Funding a project or venture by raising money from many people who each contribute a small amount
Crowdfunding
The finance needed by a new business to pay for essential fixed and current assets before it can start trading
Start-Up Capital
Money obtained from the business itself
Internal Finance
Income to a business during a period of time from the sale of goods or services
Revenue
True or false: a factory is a company's most liquid asset.
False
Refers to money received by the business
Cash inflow
Money obtained from sources outside and separate from the business
External Finance
The sums of money paid out by a business during a period of time
Cash Outflows
Items of value which are owned by the business and can be current or non-current.
Assets
Name three sources of external finance
Bank loans
Selling debentures
Debt factoring
Crowdfunding
Micro finance
Grants and subsidies
The finance a business needs to pay its day to day costs
Working Capital
Shows the stages between paying out cash for labor, materials, and so on, and receiving cash from the sale of goods.
Cash Flow Cycle
Name three sources of internal finance
Owner's savings
Retained profits
Sale of inventories
Sale of existing assets
Debts owed by the business. Can be current or non-current.
Liabilities
Tax owed to the government is an example of a...
Current Liability
When revenue is greater than the cost of sales
Gross Profit
Profit made by a business after all costs have been deducted from revenue
(Net) Profit
Difference between inflows and outflows
Net Cash Flow
Shows the value of a business’s assets and liabilities at a particular time.
Statement of Financial Position
A factory building is an example of a...
Fall in the value of a fixed asset over time
Depreciation
Net profit reinvested back into a company, after deducting tax and payments to owners, such as dividends
Retained Profit
A financial statement that records the income of a business and all costs incurred to earn that income over a period of time.
Income Statement
Shareholder’s funds + Non-current liabilities
Capital Employed
A percentage of the profits that is paid out to shareholders is each year is known as...
Dividends