front 1 Break even | back 1 The level of output at which total revenue equals total costs — no profit or loss is made. |
front 2 Capital Expenditure | back 2 Money spent by a business on acquiring or maintaining fixed assets such as land, buildings, or equipment. |
front 3 Cashflow | back 3 The movement of cash into and out of a business over a specific period. |
front 4 Cashflow forecast | back 4 A prediction of cash inflows and outflows over a given period, helping the business manage liquidity. |
front 5 Cash Flow Forecast | back 5 A forecast estimating future cash inflows and outflows. |
front 6 Cash Inflow | back 6 Money received by a business from its operations or external sources. |
front 7 Cash outflow | back 7 Money paid out by a business for expenses, purchases, or debt repayments. |
front 8 Crowd Funding | back 8 Raising small amounts of capital from a large number of individuals, typically online. |
front 9 Debt Factoring | back 9 Selling unpaid customer invoices to a third party (factor) to receive immediate cash—usually at a discount. |
front 10 Debt Finance | back 10 Borrowing funds from external sources that must be repaid with interest. |
front 11 Debentures | back 11 A long-term loan instrument used by large companies to raise capital, typically offering fixed interest. |
front 12 Direct costs | back 12 Costs that can be clearly and directly attributed to producing a specific product or service. |
front 13 Equity Finance | back 13 Raising finance by selling ownership shares in the company, rather than borrowing. |
front 14 Fixed Clost | back 14 Costs that remain constant regardless of the level of output. |
front 15 Indirect costs | back 15 Costs not directly traceable to a specific product or activity, often shared across departments or functions. |
front 16 Internal Sources of Finance | back 16 Finance raised from within the business, such as retained profits, owner's capital, or sale of assets. |
front 17 Loan | back 17 Borrowed money from a financial institution with fixed repayment terms and interest. |
front 18 Long termfinance | back 18 Funds required for long-term purposes, usually exceeding one year, such as capital investment. |
front 19 Margin of safety | back 19 The amount by which actual or expected sales exceed the break-even point. |
front 20 Marginal Costs | back 20 The additional cost incurred by producing one more unit of output. |
front 21 Micro Finance | back 21 Providing small-scale loans to individuals or small businesses who do not have access to traditional banking services. |
front 22 Net Cash Flow | back 22 Cash inflows minus cash outflows over a specific time period. |
front 23 Overdraft | back 23 An arrangement where a bank allows a business to withdraw more money than is currently in its account, up to an agreed limit. |
front 24 Owners savings | back 24 Using the owner's personal savings to finance the business. |
front 25 Revenue Expenditure | back 25 Spending on the day-to-day running costs of a business, such as wages, rent, and utilities. |
front 26 Sale and Leaseback | back 26 Selling an asset to raise funds and then leasing it back from the buyer. |
front 27 Sale of assets | back 27 Selling business-owned equipment, machinery, or inventory to raise finance. |
front 28 ShortTerm Finance | back 28 Finance needed for short periods, usually less than one year. |
front 29 Start Up Capital | back 29 The capital required to start a business and fund operations until revenue is generated. |
front 30 Variable Costs | back 30 Costs that vary directly with the level of output. |
front 31 Working Capital | back 31 Cash available to pay short-term debts, calculated as current assets minus current liabilities. |
front 32 Working Capital | back 32 The funds a business has available on a day-to-day basis to cover short-term expenses. |
front 33 Average cost (Unit Cost) | back 33 The total cost of producing one unit, calculated by dividing total costs by the number of units produced. |
front 34 Total Cost | back 34 The sum of fixed and variable costs incurred in producing goods or services. |
front 35 Marginal Cost | back 35 The additional cost of producing one more unit of output. |
front 36 Special order decisions | back 36 A decision made by management on whether to accept a non-standard order, often at a lower price or with special conditions. |
front 37 Contribution | back 37 The difference between the selling price of a product and its variable cost—used to determine break-even point and profit margins. |
front 38 Contribution per unit | back 38 Selling price per unit minus variable cost per unit. |
front 39 Bankruptcy | back 39 A legal process for businesses that are unable to pay their debts, involving the sale of assets to repay creditors. |
front 40 Liquidation | back 40 When a business is unable to pay its debts, it stops trading and its assets are sold to repay creditors. |
front 41 Administration | back 41 The process where an external administrator is appointed to manage the affairs of a financially troubled company and arrange for asset liquidation or recovery. |
front 42 Budgets | back 42 A detailed financial plan showing expected income and expenditure over a set time period. |
front 43 Incremental budgeting | back 43 A budgeting method where the current year’s budget is based on the previous year’s figures, with adjustments for anticipated changes. |
front 44 Flexible budgets | back 44 A budgeting method that allows costs to vary with levels of activity, such as changes in sales or production volumes. |
front 45 Zero budgeting | back 45 A budgeting approach where all expenses must be justified for each new period, starting from a base of zero. |
front 46 Variances | back 46 The difference between budgeted and actual performance. A favourable variance means better-than-expected results; an adverse variance indicates worse-than-expected performance. |
front 47 Break-even revenue | back 47 The level of revenue needed for a business to cover all fixed and variable costs. |
front 48 Profit and loss account | back 48 A financial statement showing revenue, costs, and profits over a specific time period, also known as an income statement. |
front 49 Statement of financial position | back 49 A financial statement showing a company’s assets, liabilities, and equity at a specific point in time. |
front 50 Capital employed | back 50 The total value of capital used in the business, typically calculated as non-current liabilities plus shareholders’ equity. |
front 51 Return on capital employed (ROCE) | back 51 A profitability ratio measuring how efficiently a business uses its capital to generate profit, calculated as (Net profit / Capital employed) × 100. |
front 52 Current ratio | back 52 A liquidity ratio that shows a firm's ability to pay short-term obligations, calculated as current assets / current liabilities. |
front 53 Acid-test ratio | back 53 A more stringent test of liquidity that excludes inventory from current assets, calculated as (Current assets - Inventory) / Current liabilities. |
front 54 Profit margin | back 54 A measure of profitability calculated as net profit divided by revenue, expressed as a percentage. |
front 55 Gross profit | back 55 The difference between sales revenue and the cost of goods sold. |
front 56 Net profit | back 56 The remaining profit after all expenses have been deducted from gross profit. |
front 57 Depreciation | back 57 The allocation of the cost of an asset over its useful life. |
front 58 Straight-line depreciation | back 58 A method of depreciation that charges the same amount each year over the asset's useful life. |
front 59 Reducing balance depreciation | back 59 A method of depreciation that applies a fixed percentage to the remaining value of the asset each year. |
front 60 Capital employed | back 60 The total value of long-term finance invested in the business, including equity and long-term debt. |
front 61 Working capital cycle | back 61 The time it takes to convert inputs into cash through sales, covering inventory, receivables, and payables periods. |
front 62 Liquidity | back 62 The ability of a business to meet its short-term financial obligations. |
front 63 Solvency | back 63 The ability of a business to meet long-term financial obligations and remain operational. |
front 64 Gearing ratio | back 64 A financial ratio that shows the proportion of debt to equity, indicating the level of financial risk. |
front 65 Internal rate of return (IRR) | back 65 The discount rate that makes the net present value (NPV) of an investment zero. |
front 66 Payback period | back 66 The time it takes for an investment to recover its initial cost from net cash inflows. |
front 67 Average rate of return (ARR) | back 67 The average annual return from an investment expressed as a percentage of the initial investment. |
front 68 Investment appraisal | back 68 The process of evaluating investment opportunities to determine their financial viability. |
front 69 Capital structure | back 69 The mix of debt and equity that a business uses to finance its operations. |
front 70 Cost of capital | back 70 The cost to a business of raising finance through equity or debt, often expressed as a percentage. |
front 71 Gross profit margin | back 71 Gross profit expressed as a percentage of revenue. |
front 72 Net profit margin | back 72 Net profit expressed as a percentage of revenue. |