Unit 1: Finance (1)

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  • Created by: jj_123
  • Created on: 03-05-15 10:19
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  • Unit 1: Finance
    • Business Costs
      • Revenue
        • Income earned by a business.
        • = Number Sold X Selling Price
        • To increase: Increase amount sold and selling price.
      • Costs
        • Are the expenses paid out to run the business.
        • Direct Costs - are expenses to making a specific product.
        • Indirect Costs - are general overheads of the business.
        • Total Costs = Direct Costs + Indirect Costs
        • Fixed Costs - Do not vary with the output of a business.
        • Variable Costs - are costs that will increase as the firm expands output.
        • Total Cost = Variable Cost + Fixed Cost
        • Average Costs = Total Cost / Output
      • Profit
        • What is left after costs have been deducted.
        • Loss - When revenue is less than costs.
        • Profit (or loss) = Revenue - Costs
    • Cash Flow
      • Flow of money in and out of a business.
      • Poor Cash Flow
        • Poor Sales
        • Overtrading
        • Poor Business Decisions
      • Improve Cash Flow
        • Sell Stock
        • Cut Payments
        • Reschedule Payments
    • Cash Flow Forecast
      • Prediction of a business future cash inflow and outflow.
      • Allows owners to check they will have enough cash.
      • Forecasted numbers can be used as targets.
      • Different parts
        • Receipts/income
        • Payments/expenditure
        • Net Cash Flow
        • Closing Balance

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