Business Finance
this is providing financial services for poor and low-income customers who do not have access to banking services, such as loans and overdrafts offered by traditional commercial banks.
What is mircofinance
these do not vary with output in the short run
What are fixed costs
It records the revenue, costs and profit (or loss) of a business over a given period of time.
What is the income statement
this records the values of a business’s assets, liabilities and shareholders’ equity at one point in time.
What is the statement of financial position (balance sheet)
It's the sum of cash payments to a business (inflows) less the sum of cash payments (outflows).
What are cashflows
It's the capital needed to pay for raw materials, day-to-day running costs and credit offered to customers.
What is working capital
These cannot be identified with a unit of production or allocated accurately to a cost centre.
What are indirect costs
this is equal to sales revenue loss cost of sales
What is gross profit
It's a record of the cash received by a business over a period of time and the cash outflows from the business.
What is the cash-flow statement
this is when a business owner cannot meet its short-term debt
What is insolvent
It's when a firm ceases trading and its assets are sold for cash to pay suppliers and other creditors.
What is liquidation
It's the selling price less variable cost per unit
What is the contribution per unit
It's the share of the profits paid to shareholders as a return for investing in the company.
What are dividends
this arises when a business is valued at or sold for more than the balance-sheet value of its assets.
What is Goodwill
this is the cash held at the end of the month that becomes next month’s opening balance.
What is the closing cash balance
It is when immediate cash is obtained, but not for the full amount of the debt. This is because the company’s profits are made by discounting the debts and not paying their full value.
What is Factoring or debt-factoring
It's fixed costs + variable costs =
What are total costs
this is the total value of assets minus the total value of liabilities.
What is shareholders' equity
It's current assets divided by current liabilities
What is the current ratio
these are suppliers who have agreed to supply products on credit and who have not yet been paid.
What are creditors
It's risk capital invested in business start-ups or expanding small businesses that have good profit potential but do not find it easy to gain finance from other sources.
What is venture capital
It's the level of output at which total costs equal total revenue, neither a profit nor a loss is made.
What is the break-even point of production
this is the direct cost of the goods that were sold during the financial year.
What is the cost of sales (or cost of goods sold)
this is current assets minus inventories
What is liquid assets
this is when a business is expanding rapidly without obtaining all of the necessary finance so that a cash-flow shortage develops.
What is overtrading