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Description
Flashcards by Mr_Lambert_Hungerhil, updated more than 1 year ago
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Created by Mr_Lambert_Hungerhil
almost 9 years ago
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| Question | Answer |
| Financial Objectives | Targets expressed in money terms such as making a profit, earning income or building wealth. |
| SMART | Specific, measurable, achievable, realistic and time-constrained. |
| Determination | The drive to succeed in business. To show commitment to an idea or setting up a business. |
| Initiative | To work independently and be able to make the first move in business. |
| Taking Risks | A skill shown by entrepreneurs. It can be risky to own your own business. |
| Making Decisions | To be in charge of making a good judgement. An entrepreneur will listen and take in information to ensure they make the right decision. |
| Planning | Planning is essential to any successful business. Clear objectives have to be set for the long term and how these objectives will be met in the short term. |
| Persuasion | A skill of an entrepreneur. To be able to convince a customer they should buy the product/ service. Or it could also mean negotiating with a supplier to lower their prices. |
| Showing Leadership | Entrepreneurs should have a vision of where the business is heading, be good at planning and have self-confidence. These are all leadership skills to succeed. |
| Revenues Sales Revenue Turnover Sales Turnover | The amount of income received from selling goods or services over a period of time |
| Total Revenue | TR = P x Q Total Revenue = Price x Quantity |
| Sales volume | The number of items or products or services sold by a business over a period of time. |
| Fixed costs | Costs which do not vary with the output produced such as rent, business rates, advertising costs, administration costs and salaries. |
| Total Costs | All the costs of a business; it is equal to fixed costs plus variable costs. |
| Total Costs | TC = FC + VC Total Costs = Fixed Costs + Variable Costs |
| Variable Costs | Costs which change directly with the number of products made by a business such as the cost of buying raw materials. |
| Profit | Occurs when the revenues of a business are greater than its costs over a period of time. |
| Loss | Occurs when the revenues of a business are less that the costs over a period of time. |
| Profit/ Loss | Profit/ Loss = Total Revenue – Total Cost |
| Cash | Notes, coins and money in the bank |
| Cash Flow | The flow of cash into and out of a business |
| Inflow | The cash flowing into a business, its receipts |
| Outflow | The cash flowing out of a business, its payments |
| Net Cash Flow | The receipts of a business minus its payments |
| Insolvency | When a business can no longer pay its debts |
| Cash Flow Forecast | A prediction of how cash will flow through a business in a period of time in future |
| Opening Balance | The amount of money in a business at the start of the month |
| Closing Balance | The amount of money in a business at the end of the month |
| Cumulative Cash Flow | The sum of cash that flows into a business over time |
| Trade Credit | Where a supplier gives a customer a period of time to pay a bill (or invoice) for goods or services once they have been delivered |
| Stocks | Materials that a business holds. Some could be materials waiting to be used in the production process and some could be finished stock waiting to be delivered to customers |
| Business Plan | A plan for the development of a business giving forecasts such as sales, costs and cash flow |
| Long term finance | Sources of money for businesses that are borrowed or invested typically for more than a year |
| Short term finance | Sources of money for businesses that may have to be repaid with immediately or fairly quickly, such as an overdraft, usually within a year. |
| Personal Savings | Money that has been set aside and not spent by individuals and households. |
| Share Capital | The monetary value of a company which belongs to its shareholders, for example, if five people each invest £10,000 into a business, the share capital will be £50,000 |
| Shareholders | The owners of a company |
| Venture Capitalist | An individual or company which buys shares in what they hope will be a fast growing company with a long term view of selling the shares at a profit. |
| Loan | Borrowing a sum of money which has to be repaid with interest over a period of time, such as 1-5 years. |
| Security (or collateral) | Assets owned by a business which are used to guarantee repayments of a loan; if the business fails to pay off the loan, the lender can sell what has been offered as security. |
| Mortgage | A loan where property is used as security. |
| Dividend | A share of the profits of a company received by shareholders who own shares. |
| Retained Profit | Profit which is kept back in the business and used to pay for investment in the business. |
| Leasing | Renting equipment or premises. |
| Overdraft facility | Borrowing money from a bank by drawing more money than is actually in a current account. Interest is charged on the amount overdrawn. |
| Factoring | A source of finance where a business is able to receive cash immediately for the invoices it has issued from a factor, such as a bank, instead of waiting the typical 30 days to be paid. |
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