Finance

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Revenue/ Turnover
Money you earn from selling goods/ services.
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Costs
Anything a business has to pay for to trade (Raw materials, Wages, Overheads)
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Profit
Money left over after costs
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Loss
When costs are higher than revenue
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Formula for proft/loss
Revenue-Costs
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Formula for Revenue
Selling price X Units sold
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Difference Between cash and profit
Cash- money you have (may be a loan) Profit- Money you make and keep
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Why is cash important?
Without cash cash a business can't but stock, pay staff or rent a property
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Why is cash flow forecast is important?
It forecasts the amount of money a business is likely to spend. This means they can check they have enough money, helps reduce outflows, helps with loans and gives the business a target
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Interpreting a cash flow forecast
Cash in=Reciepts Cash out=Payments Closing balance=Profit
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Identifying sloutions to cash flow problems
Trade credit, ask customers to pay reciepts back quicker, loan, reduce costs
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Other cards in this set

Card 2

Front

Costs

Back

Anything a business has to pay for to trade (Raw materials, Wages, Overheads)

Card 3

Front

Profit

Back

Preview of the front of card 3

Card 4

Front

Loss

Back

Preview of the front of card 4

Card 5

Front

Formula for proft/loss

Back

Preview of the front of card 5
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