Business Finance
Profit remaining after all expenses, tax and dividends have been paid profit which is ploughed back into the business.
What is Retained Profit
Cash inflow - Cash outflow = Net cash flow
What is Net cash flow?
Costs of sales plus expenses.
What is Total Costs?
Debts of the business that will have to be paid something in the future.
What is liability?
The ability of a business to pat its short-term debts.
What is liquidity?
Over draft, Trade Credit, Debt Factoring
What is short-term finance
Cash inflow
Cash outflow
What is cash flow?
Selling price times quantity sold.
What is Total revenue?
The amount of money owed to the business by customers who have been sold goods on credit.
What is Trade receivable?
(Gross profit/revenue)*100
What is gross profit margin?
Permanent finance provided by the owners of a limited company
What is Equity finance
The ability of a business to pay its short-term debts.
What is liquidity?
The cost of purchasing the goods used to make the products sold.
What is cost of sales?
The amount a business owes to its supplies for goods bought on credit.
What is Trade Payable?
(Current asstes - inventories)/Current liabilities
What is acid test ratio?
Sale of unwanted non-current assets; sale and lease back non-current asset
What is source of internal finance
An estimate of future cash inflows of a business.
What is cash-flow forecast?
An income statement is a financial of business revenue, costs and profits.
What is income statement?
Alternative term for owner's equity but can only be used by limited liability companies.
What is shareholders' equity?
(Profit/Capital employed)*100
What is return on capital employed(ROCE)?
Has no direct cost to business
What are sells amount current assets
Goods sold to customers who will pay for these at an agreed date in the future.
What is creadit sales?
profit is a reward to business owner for the risk the take in investing their capital into the business.
what is the use of profits?
Non-current assets
Current assets
Current liability
Net assets
Shareholders' equity
Non-current liability
Capital employed
What is Balence sheet?
It includes current ratio and acid test ratio.
What are liquidity ratios?