Business

Finacial strategies and accounts

?
Corporate objectives
a quantified statement of a business's goals which should include measurable targets
1 of 57
Functional objectives
a quantified statement of a department's goals which should enable it to contribute to the achievement of the business plan
2 of 57
functional strategy
the plan by which the department intends to achieve its functional objectives on a day-to-day basis
3 of 57
SMART targets
specific- no confusion about what is required, Measurable- a quantified goal is clear, Agreed- the result of consultation with those involved in their delivery, Realistic- an impossible goal can be demotivating to employees, Time-based
4 of 57
Cash-flow targets
a financial objective focused on maintaining a healthy cash balance
5 of 57
Cost minimisation
the process by which businesses attempt to maximize profits by keeping costs low
6 of 57
ROCE targets
the minimum percentage return a business strives to achieve from the capital employed in business activities
7 of 57
Shareholder's returns
the financial rewards to a shareholder in return for their investment; this can include dividends paid and increased share value
8 of 57
satisfying
aiming to achieve a satisfactory level of profit
9 of 57
Executive director
a member of the board of directors who also holds a position of responsibility in the business on a day-to-day basis, for example marketing director, finance director
10 of 57
Non-executive director
a member of the board of directors who does not work for the business on a day-to-day basis but sits on the board in an advisory or consultative role
11 of 57
income statement
a financial document that summaries a business's trading activity and expenses to show whether it has made a profit or a loss
12 of 57
Gross profit
profit after cost of sale had been deducted
13 of 57
Operating profit
profit after all other expenses have been deducted, also referred to as net profit
14 of 57
Gross profit margin
gross profit expressed as a percentage of sales revenue
15 of 57
operating profit margin
operating profit expressed as a percentage of sale revenue
16 of 57
profit quality
the sustainability of profit
17 of 57
profit utilisation
how profit is being used, i.e whether it is being ploughed back into the business or distributed to shareholders
18 of 57
balance sheet
a financial document that summaries the net worth of a business- it balances total assets with total equity and liabilities
19 of 57
inventories
the IFRS term for stocks
20 of 57
Total Equity
the total amount of money being utilized in the business from share capital and retained profit
21 of 57
Non-current assets (fixed assets)
items of value owned by the business that are likely to be kept for more than one year
22 of 57
current assets
resources owned by the business whose value varies as a result of daily business activities, e.g. cash, inventories
23 of 57
intangible assets
purchased items without physical form such as goodwill or brand names
24 of 57
current liabilities
financial obligations of the business payable within 12 months
25 of 57
Non-current liabilities (long-term liabilities)
debts that the business has more than one year to repay
26 of 57
Net assests
total assets minus total liabilities [also obtained by non-current assets plus net current liabilities minus non-current liabilities]
27 of 57
Working capital
a measure of a firm's ability to meet day-to-day expences
28 of 57
Depreciation
an accounting practice which allows the value of a fixed asses to be spread over its useful life
29 of 57
Trade receivables
amounts owed by debtors to the business
30 of 57
Debtor
someone who owes the business money i.e a customer who has not yet paid
31 of 57
Creditor
someone the business owes money to i.e a supplier who has not yet been paid
32 of 57
Liquidity
a business's ability to meet short-term cash payments on time
33 of 57
Current ratio
a measure of the ability of a business to meet short term debts
34 of 57
Acid test ratio
A measurable of the ability of a business to meet short-term debts from liquid assets
35 of 57
profitability
the relationship between business's profits and sales revenues
36 of 57
Return on capital employed (ROCE)
a measure of *** efficiently a business is using its capital to generate profits
37 of 57
Asset turnover
a measure of how effectively a business is using its assets to generate sales
38 of 57
Capital Employed
capital employed= total equity + non-current liabilities. it is the total capital invested in the business from long-term sales
39 of 57
Inventory (or stock) turnover
a measure of how many times per year a business turns over its stock through sales
40 of 57
payables (creditor)days
a measure of the average number of days taken to pay suppliers
41 of 57
Receivables (debtor) days
a measure of the average number of days taken by a business to collect its debts from customers
42 of 57
Gearing ratio
the percentage of capital employed that comes from non-current liabilities
43 of 57
shareholder ratios
ratios that help measure the value of the return received by shareholders
44 of 57
dividends per share
the number of pence per share received by shareholders
45 of 57
Dividend yield
a measure of the return received on an investment, expressed as a percentage of the current market price of the share
46 of 57
financial strategy
the long-term financial plan of action to achieve the financial objectives of the business
47 of 57
Sources of finance
the range of options available to firms to fund business operations including banks, venture capitalists and share capital
48 of 57
profit center
a section of a business for which costs and revenues and therefore profit can be identified
49 of 57
capital expenditure
the purchase of assets that will remain in the business in the medium to long term, accounted for in the balance sheet
50 of 57
Investment appraisal
the process of analyzing the financial merits of a possible future investment
51 of 57
payback
calculation of how long it will take to recoup the cost of an initial investment
52 of 57
Average rate of return (ARR)
average annual profit expressed as a percentage on initial investment
53 of 57
Net present value(NPV)
the total net return of an investment stated in today's monetary value
54 of 57
Discount factor
the rate by which future cash flows are reduced (discounted) to reflect current interest rates
55 of 57
Time value for money
recognition of the fact that £1 today is worth more than £1 in the future due to a fall in its purchasing power
56 of 57
Investment criteria
a predetermined target against which to judge an investment
57 of 57

Other cards in this set

Card 2

Front

a quantified statement of a department's goals which should enable it to contribute to the achievement of the business plan

Back

Functional objectives

Card 3

Front

the plan by which the department intends to achieve its functional objectives on a day-to-day basis

Back

Preview of the back of card 3

Card 4

Front

specific- no confusion about what is required, Measurable- a quantified goal is clear, Agreed- the result of consultation with those involved in their delivery, Realistic- an impossible goal can be demotivating to employees, Time-based

Back

Preview of the back of card 4

Card 5

Front

a financial objective focused on maintaining a healthy cash balance

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 »