Business Finance

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  • Created by: cali5ta
  • Created on: 09-05-15 12:02
How do you calculate Break-Even?
Total fixed costs / Selling price x variable cost per unit
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How do you calculate profit?
Total revenue - Total Costs
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How do you calculate total revenue?
Selling price x items sold
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How do you calculate total costs?
Fixed costs x variable costs
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Define limited liability
Share holders in the business can only lose their initial investment
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Causes of a negative closing balance
A decrease in sales, poor planing in production, holding excessive stock and having issues with creditors
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In what ways could you improve cash flow?
Reduce outflows, change supplier, reduce labour cost, debt factoring and increase sales revenue
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If cash inflows are greater than cash inflows it is a...
Cash surplus
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If cash outflows are less than cash inflows it is a...
Cash deficit
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What is a cash flow forecast?
The prediction or estimate of the cash flows in and out of the business
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What does a cash flow forecast do?
A cash flow forecast helps the business to: identify periods of cash shortfall, identify periods if cash surplus, it helps to support applications for lenders, limits borrowing and mimimses interest repayments.
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How do you calculate net cash flow?
Cash inflow - Cash outflow
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How do you calculate closing balance?
Net cash flow + opening balance
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Why SHOULD Sheena start the business?
She has enterpenurial spirit
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Other cards in this set

Card 2

Front

How do you calculate profit?

Back

Total revenue - Total Costs

Card 3

Front

How do you calculate total revenue?

Back

Preview of the front of card 3

Card 4

Front

How do you calculate total costs?

Back

Preview of the front of card 4

Card 5

Front

Define limited liability

Back

Preview of the front of card 5
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