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 inflow | back 5 Cash going into a business |
front 6 Cash outflow | back 6 cash going out of the business |
front 7 Crowd Funding | back 7 raising finance by raising small amounts of money from a large number of people, usually via the Internet. |
front 8 Debt Factoring | back 8 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 9 Debt Finance | back 9 borrowing money from a bank which must be re paid with interest |
front 10 Debentures | back 10 a medium- to long-term debt instrument used by large companies to borrow money, at a fixed rate of interest. |
front 11 Direct costs | back 11 A cost that can be directly tied to the production of specific goods or services |
front 12 Equity Finance | back 12 selling shares in the business to raise finance rather than borrowing |
front 13 Fixed Cost | back 13 Costs that don't change with output. |
front 14 Indirect costs | back 14 A cost that can't be directly tied to the production of specific goods or services |
front 15 Internal Sources of Finance | back 15 Finance sourced from inside the business - for example owner's funds, sale of assets and retained profit all are |
front 16 Loan | back 16 bank lends a fixed amount for an agreed time period, which must be repaid with interest |
front 17 Long term finance | back 17 finance required for periods usually longer than one year |
front 18 Margin of safety, | back 18 The amount sales can fall before the break-even. point is reached and the business makes no profit. |
front 19 Marginal Costs | back 19 the cost added by producing one additional unit of a product or service |
front 20 Micro Finance | back 20 lending small amounts of finance small business people to those who can’t access finance from another source |
front 21 Net cash flow | back 21 Cash inflows - cash outflows |
front 22 Overdraft | back 22 banks allow businesses to take additional money out of their account up to a certain limit |
front 23 Owners savings | back 23 – using owners own savings to finance the business |
front 24 Revenue Expenditure | back 24 money spent by a business or organization on day to day operating costs such as rent, insurance, heating, maintenance etc |
front 25 Sale and Leaseback | back 25 Selling an asset for a capital sum and then leasing at an agreed rate from the buyer. |
front 26 Sale of assets | back 26 selling equipment /machinery/inventory to finance the business |
front 27 Short Term Finance | back 27 finance required for short periods usually less than one year |
front 28 Start Up Capital | back 28 money required to set up a business and keep the business operating until the business starts to break even |
front 29 Variable Costs | back 29 Costs that change with output. |
front 30 Working Capital | back 30 - capital available to a business day to day to pay short term debts. Current Assets – current liabilities |
front 31 Average cost (Unit Cost) | back 31 This is the average cost of producing each unit of output: unit cost = total cost of producing this product /Number of units produced |
front 32 Total Cost | back 32 Total costs, = total fixed costs + total variable costs |
front 33 Marginal Cost | back 33 the cost of producing one extra unit. |
front 34 Special order decisions | back 34 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 35 Contribution | back 35 "(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 36 Contribution per unit | back 36 = selling price per unit less variable costs per unit |
front 37 Bankruptcy | back 37 Bankruptcy is a legal process conducted when a business is unable to repay outstanding debts or obligations. |
front 38 Liquidation | back 38 when a firm goes bankrupt, stops trading and its assets are sold for cash to pay suppliers and other creditors. |
front 39 Administration | back 39 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 40 Budgets | back 40 a detailed financial plan or revenue and expenditure over a specified time period. |
front 41 Flexible budgets | back 41 cost budgets for each expense are allowed to vary if sales or production vary from budgeted levels. |
front 42 Zero budgeting | back 42 setting budgets to zero each year and budget holders have to justify why they should receive any finance. |
front 43 Adverse variance | back 43 exists when the difference between the budgeted and actual figure leads to a lower-than-expected profit |
front 44 Favourable variance: | back 44 exists when the difference between the budgeted and actual figure leads to a higher-than-expected profit. |
front 45 Incremental budgeting | back 45 uses last year’s budget as a basis and an adjustment is made for the coming year. |