A2 - Business - Using financial data to measure and assess performance

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  • Created by: jkav
  • Created on: 06-11-15 11:16
Income statement
A financial document that summarises a business's trading activity and expenses to show whether it has made a profit or a loss.
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Gross profit
Profit after cost of sales has been deducted.
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Operating profit
Profit after all other expenses have been deducted, also referred to as net profit.
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Gross profit margin
Gross profit expressed as a percentage of sales revenue.
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Operating profit margin
Operating profit expressed as a percentage of sales revenue.
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Profit quality
The sustainability of profit.
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Profit utilisation
How profit is being used, i.e. whether it is being ploughed back into the business or distributed to shareholders.
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Balance sheet
A financial document that summarises the net worth of a business - it balances total assets with total equity and liabilities.
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Inventories
The IFRS term for stocks
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Total equity
The total amount of money being utilised in the business from share capital and retained profit.
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Non-current assets (fixed assets)
Items of value owned by the business that are likely to be kept for more than one year.
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Current assets
Resources owned by the business whose value varies as a result of daily business activities, e.g. cash, inventories.
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Intangible assets
Purchased items without physical form such as goodwill and brand names.
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Current liabilities
Financial obligations of the business payable within 12 months.
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Non-current liabilities (long-term liabilities)
Debts that the business has more than one year to repay.
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Net current liabilities
Current liabilities plus current assets.
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Net assets
Total assets minus total liabilities.
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Working capital
A measure of a firm's ability to meet day-to-day expenses.
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Depreciation
An accounting practice which allows the value of a fixed asset to be spread over its useful life.
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Trade receiveables
Amounts owed by debtors to the business.
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Debtor
Someone who owes the business money, i.e. a customer who has not yet paid.
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Trade payables
Amounts owed by the business to creditors.
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Creditor
Someone the business owes money to i.e. a supplier who has not yet been paid.
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Other cards in this set

Card 2

Front

Profit after cost of sales has been deducted.

Back

Gross profit

Card 3

Front

Profit after all other expenses have been deducted, also referred to as net profit.

Back

Preview of the back of card 3

Card 4

Front

Gross profit expressed as a percentage of sales revenue.

Back

Preview of the back of card 4

Card 5

Front

Operating profit expressed as a percentage of sales revenue.

Back

Preview of the back of card 5
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