Unit 2- Business Studies

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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 asset can still be used.
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What is a Profit and Loss Account?
A document that shows whether the business have made a profit or a loss over the last period.
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What is Cost of Sales?
The cost of the business selling its products.
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What is Gross Profit?
The difference between sales revenue and the cost of sales. (sales revenue - cost of sales)
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What are Overheads/Expenses?
Expenses of the business that are not directle part of the production process, such as rent, marketing and training costs.
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Whta is Net Profit?
The difference between sales revenue and total costs of the business. (gross profit - overheads)
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What is Profitablilty?
It examines the percentage of a businesses sales revenue the becomes profit.
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What is a Gross Profit Margin?
It shows the percentage of a businesses sales revenue the ends up becoming gross profit. (gross profit / sales revenue X 100)
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What is a Net Profit Margin?
It shows the percentage of a companies sales revenue that is left over as net profit. The higher the percentage, the better. (net profit / sales revenue x 100)
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What is a Balanace Sheet?
A document that lists the value of a companies assets and its liabilities.
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What are Assets?
All of the items that a business OWNS.
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What are Liabilities?
The debts that a business OWES to other organisations.
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What are Debtors?
A customer that owes you money.
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What is Current Ratio?
It compares the value of the current assets that a busines shas with the figure for its current liabilities, its expressed as X:1 (current assets / current liabilities)
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What is Liquidity?
It means how easy it is for a business to pay its short-term debts.
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What is thr formula for Acid Test Ratio?
(debtors+cash) / current liabilities.
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Other cards in this set

Card 2

Front

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

Back

What is Sale and Leaseback?

Card 3

Front

A document that shows whether the business have made a profit or a loss over the last period.

Back

Preview of the back of card 3

Card 4

Front

The cost of the business selling its products.

Back

Preview of the back of card 4

Card 5

Front

The difference between sales revenue and the cost of sales. (sales revenue - cost of sales)

Back

Preview of the back of card 5
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