Unit 5 - Finance

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  • Finance
    • Financial objectives
      • Profit
        • Gross profit
        • Operating profit
        • Profit for the year
      • Return on investment
        • Operating profit/ capital invested x 100
      • Capital structure
        • Debt
        • Equity
    • Measuring financial performance
      • Budgets
        • Revenue
        • Expenditure
        • Profit
        • Variances - adverse or favourable
      • Cash flow forecasts
        • Inflows
        • Outflows
        • Net cash flow
        • Payables and receivables
      • Break even
        • Contribution
          • Selling price - variable costs
        • Fixed costs/ contribution
        • Margin of safety
      • Profit margins
        • Operating profit
        • Gross profit
        • profit for the year
    • Sources of finance
      • Internal
        • Sales of assets
        • Retained profit
      • External
        • Venture capitalist
        • Debt factor
        • Overdraft
        • Loan
        • Share capital
        • Crowd funding
      • Influences on choice of finance
        • Legal structure
        • Cost of finance
        • Flexibility
        • Control
        • Purpose of finance
    • Improving cash flow and profits
      • Cash flow
        • Reasons for poor cash flow position
          • Overtrading
          • Giving too much trade credit
          • Poor trade credit from suppliers
          • Poor cash flow forecasting
        • How to improve cash flow
          • Reduce trade credit
          • More favourable trade credit terms with suppliers
          • Debt factor
          • Sale and leaseback
          • Improved control of working capital
          • Arrange short term borrowing
      • Profit
        • Reduce costs
        • Decrease prices
        • Eliminate unprofitable aspects of production
        • Use capacity more fully
        • Reduce number of substantial products
        • increase business's efficiency

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