front 1 Break even, | back 1 Level of output where total revenue is equal to total costs - neither a profit or loss is made. |
front 2 Capital Expenditure | back 2 money spent by a business or organization fixed assets, such as land, buildings, and equipment. |
front 3 Cash flow | back 3 cash flow in and out of the business over a period of time |
front 4 Cash flow forecast | back 4 Estimate of future cash inflows and outflows usually calculated month by month to ensure there is enough cash to pay short term debts |
front 5 Cash Flow Forecast | back 5 Estimate of future cash inflows and outflows |
front 6 Cash Inflow | back 6 Cash going into a business |
front 7 Cash outflow | back 7 cash going out of the business |
front 8 Crowd Funding | back 8 raising finance by raising small amounts of money from a large number of people, usually via the Internet. |
front 9 Debt Factoring | back 9 With debt factoring, a business can raise cash by selling their outstanding sales invoices (receivables) to a third party (a factoring company) at a discount. |
front 10 Debt Finance | back 10 borrowing money from a bank which must be re paid with interest |
front 11 Debentures | back 11 a medium- to long-term debt instrument used by large companies to borrow money, at a fixed rate of interest. |
front 12 Direct costs | back 12 A cost that can be directly tied to the production of specific goods or services |
front 13 Equity Finance | back 13 selling shares in the business to raise finance rather than borrowing |
front 14 Fixed Clost | back 14 Costs that don't change with output. |
front 15 Indirect costs | back 15 A cost that can't be directly tied to the production of specific goods or services |
front 16 Internal Sources of Finance | back 16 Finance sourced from inside the business - for example owner's funds, sale of assets and retained profit all are |
front 17 Loan | back 17 bank lends a fixed amount for an agreed time period, which must be repaid with interest |
front 18 Long term finance | back 18 finance required for periods usually longer than one year |
front 19 Margin of safety, | back 19 The amount sales can fall before the break-even. point is reached and the business makes no profit. |
front 20 Marginal Costs | back 20 the cost added by producing one additional unit of a product or service |
front 21 Micro Finance | back 21 lending small amounts of finance small business people to those who can’t access finance from another source |
front 22 Net cash flow | back 22 Cash inflows - cash outflows |
front 23 Net Cash Flow | back 23 Cash inflows - cash outflows |
front 24 Overdraft | back 24 banks allow businesses to take additional money out of their account up to a certain limit |
front 25 Owners savings | back 25 – using owners own savings to finance the business |
front 26 Revenue Expenditure | back 26 money spent by a business or organization on day to day operating costs such as rent, insurance, heating, maintenance etc |
front 27 Sale and Leaseback | back 27 Selling an asset for a capital sum and then leasing at an agreed rate from the buyer. |
front 28 Sale of assets | back 28 selling equipment /machinery/inventory to finance the business |
front 29 Short Term Finance | back 29 finance required for short periods usually less than one year |
front 30 Start Up Capital | back 30 money required to set up a business and keep the business operating until the business starts to break even |
front 31 Variable Costs | back 31 Costs that change with output. |
front 32 Working Capital | back 32 cash used to pay short term debts (current assets - current liabilities) |
front 33 Working Capital | back 33 - capital available to a business day to day to pay short term debts. Current Assets – current liabilities |
front 34 Average cost (Unit Cost) | back 34 This is the average cost of producing each unit of output: unit cost = total cost of producing this product /Number of units produced |
front 35 Total Cost | back 35 Total costs, = total fixed costs + total variable costs |
front 36 Marginal Cost | back 36 the cost of producing one extra unit. |
front 37 Special order decisions | back 37 Special-order decisions involve situations in which management must decide whether to accept unusual customer orders. These orders typically require special processing or involve a request for a low price. |
front 38 Contribution | back 38 "(Contribution looks at the profit made on individual products. It is used in calculating how many items need to be sold to cover all the business' costs (variable and fixed). |
front 39 Contribution per unit | back 39 = selling price per unit less variable costs per unit |
front 40 Bankruptcy | back 40 Bankruptcy is a legal process conducted when a business is unable to repay outstanding debts or obligations. |
front 41 Liquidation | back 41 when a firm goes bankrupt, stops trading and its assets are sold for cash to pay suppliers and other creditors. |
front 42 Administration | back 42 When a business goes bankrupt an administrator is called into oversee the liquidation of the business assets. This process is called “going into administration” |
front 43 Budgets | back 43 a detailed financial plan or revenue and expenditure over a specified time period. |
front 44 Incremental budgeting | back 44 uses last year’s budget as a basis and an adjustment is made for the coming year. |
front 45 Flexible budgets | back 45 (Flexible budgeting) cost budgets for each expense are allowed to vary if sales or production vary from budgeted levels. |
front 46 Zero budgeting | back 46 setting budgets to zero each year and budget holders have to justify why they should receive any finance. |
front 47 Variances | back 47 Adverse variance: exists when the difference between the budgeted and actual figure leads to a lower-than-expected profit. Favourable variance: exists when the difference between the budgeted and actual figure leads to a higher-than-expected profit. |