business

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  • Created by: Lois122
  • Created on: 15-05-17 18:35
What are the short term finances?
Overdraft, Loan, Trade credit, Factoring, Hire purchase
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What are the medium term finances?
Loan, Leasing
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What are the long term finances?
Loan, Debentures, Issue of shares, Retained profit, Sale and lease back
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What are some other sources of finance?
Government assistance, Depreciation, Venture capital
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What is a Debenture?
Only available to PLC's, the business sells a debt so that the business is in debt to them.
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What is factoring?
When a business sells one of its debts to raise finance.
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How do you work out contribution per unit?
price - variable costs per unit
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How do you work out breakeven?
fixed costs/contribution per unit
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How to work out payback period?
amount left to pay/cash flow of next year x 365
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How do you calculate accounting rate of return?
profit per year/investment x 100
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How do you work out net present value?
E(net return x discount factor) -investment
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How do you calculate gross profit?
sales revenue-cost of sales
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How do you calculate operating profit?
gross profit - expenses
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How do you calculate Profit before tax?
operating profit - finance costs
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How do you calculate profit for the year (retained profit)?
Operating profit - tax and dividends
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How do you calculate current ratio?
current assets/current liabilities
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How do you calculate acid test ratio?
current assets - stock/current liabilities
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How do you calculate gross profit margin?
gross profit/ sales revenue x 100
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How do you calculate net profit margin?
operating/sales revenue x 100
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How do you calculate return on capital employed?
operating profit/capital employed x 100
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How do you calculate return on equity?
profit for the year / share holders equity
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Other cards in this set

Card 2

Front

What are the medium term finances?

Back

Loan, Leasing

Card 3

Front

What are the long term finances?

Back

Preview of the front of card 3

Card 4

Front

What are some other sources of finance?

Back

Preview of the front of card 4

Card 5

Front

What is a Debenture?

Back

Preview of the front of card 5
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