Unit 2.3

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What is Retained Profit?
Profit kept in the business after shareholders and taxes have been paid.
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What is Sale and Leaseback?
Selling an asset such as a building to another company and then leasing it back from them so that the asset can still be used.
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What are Profit and Loss Accounts?
This shows whether the business made a profit or a loss over the last period (usually a year)
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What is Gross Profit?
The difference between sales revenue and the cost of making the products. (Sales revenue - cost of sales)
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What are Overheads?
Expenses of the business that are not directly part of the production process such as rent, marketing or training costs.
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What is Net Profit?
The difference between sales revenue and total costs of the business. (gross profit - overheads)
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What is Profitabilty?
Rather than looking at the raw profit figure that a business has made, profitability examines the percentage of a business's sales revenue that becomes profit.
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What is a Balance Sheet?
A document that lists the value of a company's assets and its liabilities.
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What are Assets?
A business's assets are all of the items that they own.
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What are Liabilities?
A business's liabilities are the debts that it has to other organisations.
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What is Liquidity?
This means how easy it is for a business to pay its short term debts.
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What is Current Ratio?
This compares the value of the current assets that a business has with the figure for its current liabilities. It is expressed as x:1
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Card 2

Front

What is Sale and Leaseback?

Back

Selling an asset such as a building to another company and then leasing it back from them so that the asset can still be used.

Card 3

Front

What are Profit and Loss Accounts?

Back

Preview of the front of card 3

Card 4

Front

What is Gross Profit?

Back

Preview of the front of card 4

Card 5

Front

What are Overheads?

Back

Preview of the front of card 5
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