Finance in Business 4.5 / 5 based on 13 ratings ? BusinessFinanceBTEC NationalEdexcel Created by: babeyshepCreated 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
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