Applied Business Financial Key words

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Income Statement
Measure the performance of a busines over a certain period of time
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Profit Quality
Looks at whether the reported profit can be sustained
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Financial Accounts
Record, summarise and report the transactions of the business
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Management Accounts
Analyse and present financial data to help decision making and monitor performance
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Assets
Something that the business owns or can benefit from
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Current Assets
Inventory or things that can be sold
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Non-Current Asset
Money tied up in the business
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Liabilities
Anything the business owes (Accounts and wages payable, rent and taxes, trade debt, and short and long-termloans)
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Current Liabilities
Obligations such as deferred dividend, trade credit, and unpaid taxes, arising in the normal course of a business and due for payment within a year.
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Long-term Liabilities
Obligation payable in goods or services at a future period more than 12 months away from today or the date of balance sheet
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Ratio Analysis
Analysing relationships between financial data to asses the performance of a business
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Revenue Expenditure
Cash spent on day to day operations
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Capital Expenditure
Cash spent on investment in the business - Non-current asset which as an economic life in the business (they are intended to be kept, rather than sold/turned into products)
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Investment Appraisal
Process of analysing whether investment projects are worthwhile
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Pay Back Period
Time it takes for a project to repay it's initial investment
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Net Present Value
Calculates the monetary value of the projects future cash flow
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Average Rate of Return
Method looks at total accounting return for a project to see if it meets the target return
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Retained Profit
Profits generated by a company that are not distributed to stockholders (shareholders) as dividends but are either reinvested in the business or kept as a reserve for specific objectives
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Public Rights Issue
Shares given to new shareholders i.e the public
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Rights Issue
New shares for existing customers
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Debentures
Form of bond or long term loan which is issued by the company, usually with a fixed rate of interest
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Cost Minimisation
Aims to achieve the most cost-effective way of delivering goods and services to the required level of quality
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Shareholders
An individual, group, or organization that owns one or more shares in a company
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Other cards in this set

Card 2

Front

Profit Quality

Back

Looks at whether the reported profit can be sustained

Card 3

Front

Financial Accounts

Back

Preview of the front of card 3

Card 4

Front

Management Accounts

Back

Preview of the front of card 4

Card 5

Front

Assets

Back

Preview of the front of card 5
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