Finance in Business

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  • Created by: babeyshep
  • Created on: 23-04-15 14:20
Fixed Cost
Costs that DON'T change with output - They have to be paid regardless of how much a business produces
1 of 20
Variable Costs
Costs that DO change with output - These costs are directly linked to the product or service
2 of 20
Operating Costs
Costs that a business has to pay when the business sets up - For example fixtures and fittings
3 of 20
Total Costs
Fixed Costs + Variable Costs
4 of 20
Revenue
The money that comes into the business - AKA turnover or revenue.
5 of 20
Profit
The amount of money made by a business AFTER paying out all of its costs
6 of 20
Break-Even
Total Revenue = Total Costs (No profit or loss)
7 of 20
Margin of Safety
This is the difference between break-even point and the number of units you expect to sell
8 of 20
Cash Flow Forecasting
A forecast of the money expected to come in to and go out of the business
9 of 20
Inflows
Money coming into the business
10 of 20
Outflows
Money going out of the business
11 of 20
Cost of Sales
Costs directly linked with the production of a product
12 of 20
Gross Profit
Sales - Cost of Sales
13 of 20
Net Profit
Gross Profit - Expenditure
14 of 20
Income Statement
A statement of income and expenditure - Usually produced yearly
15 of 20
Balance Sheet
A statement outlining the financial position of the business
16 of 20
Assets
Things the business owns
17 of 20
Liabilities
Things the business owes
18 of 20
Sources of Finance
Ways in which the business can raise money. (Can be internal and external)
19 of 20
Budgeting
Planning income and expenditure within a business
20 of 20

Other cards in this set

Card 2

Front

Costs that DO change with output - These costs are directly linked to the product or service

Back

Variable Costs

Card 3

Front

Costs that a business has to pay when the business sets up - For example fixtures and fittings

Back

Preview of the back of card 3

Card 4

Front

Fixed Costs + Variable Costs

Back

Preview of the back of card 4

Card 5

Front

The money that comes into the business - AKA turnover or revenue.

Back

Preview of the back of card 5
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