Business 3.3 Definitions

HideShow resource information
Cash Flow
The flow of cash into and out of a business
1 of 20
Financial Management
Deliberately changing monetary variables like cash flows to achieve financial objectives such as improved cash flows
2 of 20
De-Stocking
Reducing the level of stocks in a business
3 of 20
Trade Credit
Where a supplier gives a customer a period of time to pay for a bill (or invoice) for goods or services once they have been delievered
4 of 20
Profit
Occurs when the revenues of a business are greater than its costs over a period of time
5 of 20
Revenues
The amount of money received from selling goods or services over a period of time
6 of 20
Break-Even Point
The level of output where total revenues are equal to total costs; this is where neither a profit nor a loss is being made
7 of 20
Total Revenue
The revenue earned by a business from the sale of a given quantity of products. It is qual to quantity sold X average price
8 of 20
Total Costs
All the costs of a business; equal to fixed costs plus variable costs
9 of 20
Fixed Costs
Costs which do not vary with the amount produced, such as rent, business rates, advertising costs, administration costs and salaries
10 of 20
Variable Costs
Costs which change directly with the number of products made by a business, such as the cost of buying raw materials
11 of 20
Break-Even Chart
A graph which shows total revenue and total cost, allowing the break-even point to be drawn
12 of 20
Margin of Safety
The amount of output between the actual level of output where profit is being made and the break-even level of output; if the margin of safety is zero, then production is at or below the break-even level
13 of 20
Financing a Business
How a business obtains money and other financial resources to start up, expand and if necessary pay off losses it has made
14 of 20
Internal Sources of Finance
Finance which is obtained within the business such as retained profit or the sales of assests
15 of 20
External Sources of Finance
Finance which is obtained from outside the business such as bank loans and cash from the issue of new shares
16 of 20
Equity of Share Capital
The monetary value of a business that belongs to the business' owners. In a company, this would be the value of their shares
17 of 20
Share
A part ownership in a business; for example a shareholder owning 25% of shares of a business owns a quarter of the business
18 of 20
Overdraft
Borrowing money from a bank by drawing more money than is actually in a current account. Interest is charged on the amount overdrawn
19 of 20
Bonds
A long-term loan where typically interest is paid at regular intervals like a year and the loan is all repaid at the end of the life of the bond. Bonds are traded on the stock markets
20 of 20

Other cards in this set

Card 2

Front

Deliberately changing monetary variables like cash flows to achieve financial objectives such as improved cash flows

Back

Financial Management

Card 3

Front

Reducing the level of stocks in a business

Back

Preview of the back of card 3

Card 4

Front

Where a supplier gives a customer a period of time to pay for a bill (or invoice) for goods or services once they have been delievered

Back

Preview of the back of card 4

Card 5

Front

Occurs when the revenues of a business are greater than its costs over a period of time

Back

Preview of the back of card 5
View more cards

Comments

No comments have yet been made

Similar Business Studies resources:

See all Business Studies resources »See all 3.3 resources »