Give me money
Who wouldn't love free money!? These financial benefits are given by the government to reduce business costs and encourage production
What are subsidies?
Accountant prepare this to estimate the firms future cash inflows and outflows
What is cashflow forecast?
Gross profit - overhead expenses, or profit made before tax and interest subtraction but after all costs of sales and overheads have been deducted
What is net profit / operating profit / profit before interest and tax?
Land, buildings, vehicles and machinery
What are fixed assets?
The length of time it takes for the net cash inflows to pay back the original capital cost of the investment
What is payback period?
You win and you lose. It's important to record your revenue, costs, profits over a period of time
What is profit and loss account?
(Annual profit / initial capital cost)* 100, or a measure of the yearly profitability of an investment as a % of the initial investment
What is average rate of return? (ARR)
Accounts payable (Suppliers who have allowed the business credit), bank overdraft and unpaid dividends and unpaid tax.
What are current liabilities?
Traditional commercial banks wont give me a loan because I don't meet their requirements, but the amount is very small so I seek this type of financing instead
What is micro financing?
To make a mobile phone that I intend to sell I need to buy the camera, phone shell, and other hardware pieces that make up my product, the money spent on this is referred to as this
What are costs of good sold?
Current assets/current liability to measure whether a firm has enough resources to meet its short-term obligations
What is current ratio?
An intangible asset that has been developed from human ideas and knowledge
What is intellectual property?
This source of financing means that a company needs to give up control and ownership
What is sale of shares / equity finance?
The main 3 financial statements are profit and loss, cash flow, and this
What is a balance sheet?
Liquid assets / current liabilities, or a strict test of a firms liquidity as it ignored stocks as an asset as it has not been sold yet
What is acid test / quick ratio?
The profit left after all deductions, including dividends, have been made
What is retained profit?
Bank overdrafts (when a bank agrees to a business borrowing up to an agreed limit as and when required), trade credit, debt factoring
What is short term external finance?
The money held by the business at the start of the month
What is opening cash balance?
I'VE COVERED ALL MY COSTS!
What is break-even?
Individual investors who put in their own money in a variety of businesses and seek better return in the future than they would from conventional investments
Who are angel investors / business angels?