3.1 Intro to Finance
3.1 Items that a business owns that last more than a year and include machinery, land, buildings, vehicles, and equipment.
What are non-current/fixed assets?
3.2 Sources of finance or money obtained from within the business and is easier to access by businesses that are already established.
What is internal source of finance?
3.2 Financing that is usually expected to be paid back within 12 months or less.
What is short-term finance?
3.4 What a business gets when it deducts cost of sales from sales revenue.
What is gross profit?
3.4 The money (cash or debtor payments) that businesses receive from the sale of goods and services.
What is a current asset?
3.1 Money spent to acquire non-current (fixed) assets in a business
What is Capital expenditure?
3.2 Sources of finance or money obtained from sources outside the business, usually from financial institutions or individuals
What are external sources of finance?
3.2 Finance that is over one year.
What is long terms finance?
3.4 A sum of money paid to shareholders, which is decided by the board of directors of a company.
What are dividends?
3.4 Long-term debts or borrowings payable after 12 months by the business.
What are non-current liabilities?
3.1 Money used in the day-to-day running of a business
What is Revenue expenditure?
3.2 A source of finance for sole traders that comes mostly from their own personal savings.
What are personal funds/savings?
3.3 Is an expenditure or amount paid to produce or sell a good or service, including the acquisition of business resources; The outflow of money from a business.
What is a cost or expense?
3.4 Refers to the amount of money that would be returned to a business if all of the assets were liquidated.
What is equity?
3.5 :gross profit margin, profit margin, return on capital employed
What are profitability ratios?
3.2 A source of finance where you rent a tool/machine/vehicle but have the option to buy it later.
What is leasing?
3.2 Profit that remains after a business (a profit-making entity) has paid out dividends to its shareholders.
What is retained profit?
3.3 is income earned or money generated from the sale of goods or services; the inflow of money to a business.
What is revenue?
3.4 Things that a business owns that have monetary value.
What are assets?
3.5 This measures the ability of a firm to pay off its short-term debt obligations. Two examples are current ratio and acid test (quick) ratio.
What are liquidity ratios?
3.2 Allows a business to temporarily take out more money then exits in it's bank account.
What is overdraft?
3.2 Highly affluent individuals who provide financial capital to small start-ups or entrepreneurs in return for ownership equity in their businesses.
What are business Angels?
3.3 Costs that do not change with the amount of goods or services produced.
What are fixed costs?
3.4 Debts owed by a business
What is Liabilities?
3.5 A financial analysis tool that assesses a firm’s financial statements and aids its decision-making.
What is ratio analysis?