Business Unit 3.3

HideShow resource information
  • Created by: 13evewat
  • Created on: 18-04-18 18:45
Financial Management
Changing monetary variables such as cash flows to achieve financial objectives such as improved cash flow.
1 of 16
Cach Flow
The flow of cash into and out of a business.
2 of 16
Closing Balance and Opening Balance
Closing- Money expected in the bank at the end of the month. Opening- Money in the bank at the beginning of the month.
3 of 16
Net Cash Flow
Toatal inflows - Total outflows
4 of 16
Decreasing Cash Outflows
Delay paying invoices. Leasing rather than buying. Reduce stock orders. Improve credit terms with suppliers. Use cheaper sullpiers.
5 of 16
Improving Cash Inflows
Selling assets. Increasing sales revenue. De-stocking. Reduce credit terms with customers. Encourage customers to pay early. Use short term sources of finance e.g overdrafts.
6 of 16
Leasing
Renting equipment rather than buying it to help reduce outflows.
7 of 16
Selling Assets
Selling items of value that the business owns to improve inflows. E.g property or equipment.
8 of 16
Break-even Point
The point where total costs and total revenue is equal. The business isn't making a loss or a profit.
9 of 16
Break-even Formula
Total fixed costs/ (Price-Variable cost per item)
10 of 16
Margin of Safety
Amount of output between the actual level of output and where profit is beig made and the break-even point level of output. How much production will fall before making a loss.
11 of 16
Margin of Safety Formula
Max or current output- Break-even output
12 of 16
Profit
Total revenue - Total costs
13 of 16
Total Revenue
Income from sales. Price x Quantity sold
14 of 16
Insolvency
When the business is unable to pay their debts.
15 of 16
Ways of Financing Growth
Share capital (selling shares). Taking out a bank loan. Retained profit. Selling Assets.
16 of 16

Other cards in this set

Card 2

Front

The flow of cash into and out of a business.

Back

Cach Flow

Card 3

Front

Closing- Money expected in the bank at the end of the month. Opening- Money in the bank at the beginning of the month.

Back

Preview of the back of card 3

Card 4

Front

Toatal inflows - Total outflows

Back

Preview of the back of card 4

Card 5

Front

Delay paying invoices. Leasing rather than buying. Reduce stock orders. Improve credit terms with suppliers. Use cheaper sullpiers.

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 Unit 3.3 resources »