| what is revenue? | money coming into a business |
| what is capital? | the financial resources available to a business for purchasing fixed assets and raw materials |
| what is budgetary control? | monitoring the financial affairs of a business, so costs don't exceed revenue |
| whats credit control | action taken to bring in money which is owed to the company for goods or services |
| whats stock? | a businesses products, before they're sold |
| whats stock control? | management of stock, to ensure that orders can be fulfilled but there's not an unnecessary large amnt of revenue |
| whats cash flow | the flow of money in and out of the business over a particular period of time |
| whats cash budget | active control of cashflow |
| whats an invoice | a document send to a customer or client, requesting payment for goods or services within a certain period of time |
| whats a receipt | acknowledgement of payment for goods or services |
| whats a delivery note | a document which indicates which goods are being delivered to a customer |
| what is turnover defined as? | “The amount derived from the provision of goods and services falling within the company’s ordinary activities, after the deduction of trade discounts, VAT and any other taxes based on the amounts so derived” |
| what is gross profit? | the difference between sales revenue and the cost of sales |
| whats labour intensive business? | is one which relies primarily on human resources (rather than other possible factors) e.g. a firm of solicitors or a public relations consultancy. Such businesses depend on the availability of labour at an affordable price and are vulnerable to labour shortages and sudden increased staff costs. |
| whats a capital intensive business? | is one which is less dependant on human resources, for instance an automobile factory where the cars are built entirely by robots or a nuclear power plant. Such businesses may be expensive to start up and require a lot of outside investment. |
| whats FIFO | FIRST IN, FIRST OUT |
| what is lifo? | last in first out |
| what does to credit mean | acknowledge receipt of services rendered |
| what is a debtor | a person, country, or organization that owes money. |
| what is cash | can be more necessary at times and a vital part of cash flow is the timely anticipation of cash needs. So the prep and use of cash flow forecasts. |
| source of finance? | 1. Family and friends,
2. Retained profit,
3. A new share issue,
4. Obtaining a loan or mortgage,
5. Selling unwanted assets,
6. Overdrafts,
7. Trade credits,
8. Hire purchase,
9. Gov grants, |
| disadvantages and advantages of finance | 123 |
| what is long term finance | used to finance the acquisition of fixed capital assets including land, buildings, plant and machinery. |
| what does long term finance refer to? | provision of finance for a period of longer than 10 years |
| what are retained profits? | amount of a business's net income that is kept within its accounts, rather than paid out to shareholders |
| sources of loan capital? | 1. debentures
2. mortgage loans
3. long term loans
4. venture capital
5. crowdfunding
6. personal capital, friends and fam
7. gov grants and loans |
| what is debt factoring | the selling of trade debts |
| crowdfunding is.. | quick and simple, offering less risk to investors, due to the small amounts given (so more likely to gain investment). It can raise awareness and a following of interested parties who can expand the awareness even further. |
| disadvantages to crowdfunding ? | A business with a unique idea may not with to share it on the internet. It is best to be protected by intellectual property laws including trademarks and patents first, if necessary.
Uninspiring or complex pitches are more likely to struggle to attract funding.
It can take time to promote the pitch and reach a wide audience — time is money for a business and a sole trader may find it hard to achieve awareness needed to meet their capital target. |
| such traders are in the position where? | they can increase their level of turnover without increasing their level of work capital. |
| whats a prospectus | formal legal document designed to provide information and full details about an investment offering for sale to the public |
| what is a statement of lieu of prospectus | a document filed with the Registrar of the Companies ( ROC ) when the company has not issued prospectus to the public for inviting them to subscribe for shares |
| what can the issuing house do | put out the statement in lieu of prospectus; receive the applications; handle all the administrative work, and may underwrite the issue.
Underwriting is the process by which the issuing house buys the entire share issue from the principle company and re sells them to the public. |
| what are debentures | loans made by the ppl to the company rather than shares in a company |
| uses of finance | Purchase of fixed assets
Research and development
Purchase of current assets
Other operational costs (like wages) |
| what is venture capital | an equity investment in an unquoted company.
Venture capitalists and institutions provide a source of funds for unquoted small and medium sized enterprises. |
| what is crowdfunding | This is a way of raising finance by asking a large number of ppl each for a small amnt of money, typically via the internet. |
