Ch. 12 Financial Management

All income that a business receives over a period of time.

• Revenue

• Expenses

• Budget

• Cash Budget

The costs of operating a business.

• Revenue

• Expenses

• Operating Budget

• Cash Budget

Detailed plans for the financial needs of individuals, families, and businesses.

• Revenue

• Expenses

• Operating Budget

• Budget

Plans income and expenses from the beginning of a new business or a major business expansion until it becomes profitable.

• Start-up Buget

• Expenses

• Operating Budget

• Budget

Describes the financial plan for ongoing operations of the business for a specific period of time.

• Start-up Buget

• Expenses

• Operating Budget

• Cash Budget

An estimate of the actual money received and paid out for a specific period.

• Start-up Buget

• Revenue

• Budget

• Cash Budget

Basic financial equation is...

• revenue - profit = loss

• expenses + revenue = profit or loss

• profit - loss = revenue and expenses

• revenue - expenses = profit or loss

Used to record and analyze the financial performance of a business.

• Financial Records

• Owner's Equity

• Assets

• Income Statement

What a company owns; anything of value owned by a business.

• Financial Records

• Owner's Equity

• Assets

• Liabilities

What a company owes.

• Income Statement

• Owner's Equity

• Assets

• Liabilities