Business Studies - Finance 0.0 / 5 ? Business StudiesFinanceGCSEAQA Created by: baggiez_boiCreated on: 04-05-14 18:25 Why do businesses need finance? To rent/bu premises, lease/buy vehicles, advertise, lease/buy equipment and machinery, buy new materials and buy stock. 1 of 22 Name five sources of finance? Owners funds, bank loans/overdrafts, mortgages, famil/friends, goverment grants or lease/hire purchase agreements. 2 of 22 What is price? The amount of money a business requests customers to pay for a single item. 3 of 22 What is sales? The number of products sold within a given period of time. 4 of 22 How do you calculate revenue? Selling price multiplyed by the number of goods sold. 5 of 22 What are costs? Monetery value that is leaving the business to either set up or run the business. 6 of 22 What is profit? The excess money left over when a business has cleared it's debts. 7 of 22 How do you calculate profit/loss? Revenue - Costs. 8 of 22 What is a loss? When a businesses costs are larger than the sales revenue. 9 of 22 What is cashflow? The flows of money in and out of a business. 10 of 22 *** does money flow in? Through revenue (service of product).` 11 of 22 How does money flow out? When wages/expenses are paid and stocks are purchased. 12 of 22 What does negative cashflow (more money out than in) mean? Shortage of cash to pay the bills. 13 of 22 What should be avoided when the cashflow is positive? A high surplus of cash in a non interest bearing account. 14 of 22 What is the aim of a business in terms of cashflow? To gave either a positive of balanced cashflow. 15 of 22 Why are cash flow forecasts important? Easy to identify when the business may be short of cash as well as avoiding cash shortages in advance 16 of 22 What five solutions to cash flow problems? Delay payments, find new sources of inflow, reduce outflow, arrange an overdraft or gain more investment from owners. 17 of 22 How do you calculate total infloe? All inflows added together. 18 of 22 How do you calculate total outflow? All outflows added together. 19 of 22 How do you calculate the net cah flow? Inflows - Outflows. 20 of 22 How do you calculate the closing balance? Opening Balance + Net Cash Flow. 21 of 22 What is teh opening balance? Your closing balane carried forward to teh next month. 22 of 22
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