What percentage of revenue is being kept by the business after different costs have been paid.

(a)  

Total Revenue – Total Costs

(a)  

The reward for saving, the cost of borrowing. A percentage added to the balance (of the savings or loan) for a given period of time – such as each month

(a)  

The responsibility for debts of a business. If a business takes out a loan, it becomes a liability – the business is responsible for repaying.

(a)  

The money moving into and out of the business.

(a)  

The difference between cash inflows and outflows.

Equation is: Cash Inflows – Cash Outflows

(a)  

The business is divided into more shares, the new shares are made available for the public to buy, and the business receives the money. An external source of finance.

(a)  

The average amount of profit made from an investment, as a percentage of the initial cost.

Equation is average profit per year ÷ initial cost x 100

(a)  

Setting out to make the most profit possible, even if it means not achieving, or having to put on hold, other goals.

(a)  

Profit from previous years that has been kept for future projects. This is an internal source of finance.

(a)  

Operating Profit ÷ Revenue x 100

(a)  

Operating Profit – Tax and Finance Costs

(a)  

Money that the business has in cash or in the bank available to spend.

(a)  

Money given to businesses by the Government in exchange for them operating in a particular place or way. They must be applied for.

(a)  

Money coming into the business.

(a)  

Income is greater than expenditure.

(a)  

Income from sales.

(a)  

How much money still in the bank account at the end of a month / year.

(a)  

Money going out of the business.

(a)  

How many units must be sold in order to break-even. At this point, total costs and total revenue are the same.

(a)  

How many more sales are being made than necessary to break-even.

(a)  

Gross Profit ÷ Revenue x 100

(a)  

How much money is in the account at the beginning of a month or year.

(a)  

Gross Profit - Overheads

(a)  

Getting the money to invest in machinery etc. to start or grow a business.

(a)  

Getting money from business, people, or other organisations outside the business. For example, loans from banks, selling shares to private investors, subsidies from the Government.

(a)  

Gross Profit - Overheads

(a)  

Funding the business using the owners’ own money, by selling assets belonging to the business, or by making use of Sale & Leaseback.

(a)  

Expenditure is greater than income.

(a)  

Costs that do not change when our output changes. For example, rent.

(a)  

Costs that change depending on the level of production. For example, when more units are produced, more raw materials are consumed

(a)  

Buying items by making an initial payment, then paying the remaining money owed over a longer period of time.

(a)  

An amount of money borrowed for a period of time, with an agreed rate of interest and deadline, repaid in instalments.

(a)  

Also called a Balance Sheet – a document that summarises the assets, liabilities, and equity of a business. Total Costs All costs a business must pay in order to operate.

(a)  

Agreed amount that can be spent when the balance of a bank account if £0, this allows the balance to be negative.

(a)  

A prediction of how much money will flow into and out of the business. It is a planning tool.

(a)  

A graph showing costs and revenue, and the point where they cross is the break-even point, this shows the output required to break-even.

(a)  

A document that summarises the money moving into and out of the business. Showing whether a profit or loss is being made.

(a)  

A business sells an asset and then leases it back from the new owners. An internal source of finance that allows a business to release money tied up in buildings or expensive equipment.

(a)  

A special type of loan, for more money paid back over a longer time in order to buy property.

(a)