key terms 1.3

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profit

The amount of money left over once total costs are deducted from the revunue.

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social objective

Likely non-financal, which will mean the business will do something that will improve the local community.

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market share

The propotion of sales in the market made by one business.

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income stream

A source of regularn income, this could be the money a business recieves from its customers.

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visable

Capable of working/succeeding.

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income statement

A financal statement showing the amount of money earned and spent in a perticular period and the resulting of profit or loss.

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stakeholder

Ayone who has an intrest in the activities of a business, such as its staff, suppliers and even customers.

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break-even point

This is the point where the total costs meet nthe revenue. where the business can begin to gain a profit.

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credit

A contractual agreement in which a borrower receives something of value now and agrees to repay the lender at some later date with consideration, generally with interest

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overheads

The indirect costs or fixed expenses of operating a business (that is, the costs not directly related to the manufacture of a product or delivery of a service) that range from rent to administrative costs to marketing costs. Overhead refers to all non-labor expenses required to operate your business.

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insolvent

company is insolvent (unable to pay its debts) if it either does not have enough assets to cover its debts or if it is unable to pay its debts as they fall due.

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consumables

Consumables are goods used by individuals and businesses that must be replaced regularly because they wear out or are used up. They can also be defined as the components of an end product that is used up or permanently altered in the process of manufacturing such as semiconductor wafers and basic chemicals.

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trade credit

 An arrangement to buy goods or services on account, that is, without making immediate cash payment. For many businessestrade credit is an essential tool for financing growth. Trade credit is the credit extended to you by suppliers who let you buy now and pay later.

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overdraft

A bank overdraft is flexible borrowing facility on a bank current account which is repayable on demand. A bank overdraft does not actually result in cash flowing into a business.It depends on what the bank balance is day to day. Interest is calculated daily, usually at a high rate, on the overdrawn balance.

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cheque

a document that orders a bank to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued.

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venture capital

Start up companies with a potential to grow need a certain amount of investment. Wealthy investors like to invest their capital in such businesses with a long-term growth perspective. This capital is known as venture capital and the investors are called venture capitalists

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return on investment

 A profitability measure that evaluates the performance of a business by dividing net profit by net worth. Return on investment, or ROI, is the most common profitability ratio. There are several ways to determine ROI, but the most frequently used method is to divide net profit by total assets

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shareholder

investors who are part owners of a business.

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share capital

The money invested in a company by the shareholders. Share capital is a long-term source of finance. In return for their investment, shareholders gain a share of the ownership of the company.This is a common method of financing a start-up.

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credit check

Credit checking, with regards to forex, is performed on the financial backing of the counterparties in a forex transaction. This credit check ensures that both parties have the means necessary to cover their leveraged positions in the trade and is done before the transaction takes place.

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security

 a certificate or other financial instrument that has monetary value and can be traded. Securities are generally classified as either equity securities, such as stocks and debt securities, such as bonds and debentures.

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asset

any item of value that a business owns, such as its machinary or premises  

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guarantor

A person who guarantees to pay for someone else's debt if he or she should default on a loan obligation. A guarantor acts as a co-signer of sorts, in that they pledge their own assets or services if a situation arises in which the original debtor cannot perform their obligations.

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guarantor

A person who guarantees to pay for someone else's debt if he or she should default on a loan obligation. A guarantor acts as a co-signer of sorts, in that they pledge their own assets or services if a situation arises in which the original debtor cannot perform their obligations.

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retained profit

the profit kept in the company rather than paid out to shareholders as a dividend.Retained profit is widely regarded as the most important long-term source of finance for abusiness.

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