Flashcards for content: 2.1

Pregunta	Respuesta
Capital	The money provided by owners in a business.
Capital Expenditure	Spending on business resources that can be used repeatedly over a period of time. E.g. a company vehicle, machinery or a factory.
Revenue Expenditure	Spending on business resources that have already been consumed of will be very shortly. E.g. wages, raw materials or fuel.
Retained Profit	Profit after tax that is put back into business and not returned to the owners. (+) No interest/admin (+) Flexible (-) Opportunity Cost (-) If used there are lower dividends for shareholders
Sale of Assets	An established business may be able to sell some unwanted assets to raise finance.
Sale and leaseback	The practice of selling assets such as property or machinery, and leasing them back from the buyer.
Owner's Capital	Money provided by the owner of a business, usually from personal savings.
External Finance	Money raised from outside the business.
Bank Overdraft	An agreement between a business and a bank that mean a business can spend more money than it has in its account (going 'overdrawn'). The overdraft limit is agreed and interest is only charged when the business goes overdrawn.
Crowd funding	Where a large number of individuals (the crowd) invest in a business or or project on the internet, avoiding the use of a bank.
Debenture	A long-term loan to a business.
Equities	Another name for an ordinary share.
Issued share capital	Amount of current share capital arising from the sale of shares.
Lease	A contract to acquire the use of resources such as property or equipment.
Peer-to-peer lending (P2PL)	Where individuals lend to other individuals without prior knowledge of them, on the internet.
Permanent Capital	Share capital that is never repaid by the company.
Secured Loans	A loan where the lender required security, such as property, to provide protection in case the borrower defaults.
Share Capital	Money introduced into the business through the sale of shares.
Unsecured loans	Where the lender has no protection if the borrower fails to repay the money owed.
Venture capitalism	Providers of funds for small or medium-sized companies (SMEs) that may be considered too risky for other investors.
Capital Gain	The profit made (by a shareholder) from selling a share for more than it was bought.
Collateral	An asset that might be sold to pay a lender when a loan cannot be repaid.
Incorporated business	A business model in which the business and owner(s) have separate legal identities.
Limited liability	A legal status that means shareholders can only lose the original amount they invested in a business.
Long-term finance	Money borrowed for more than one year. e.g. mortgage.
Rights issue	Issuing new shares to existing shareholders at a discount.
Short-term borrowing	Money borrowed for 12 months or less. E.g. bank overdraft.
Undercapitalised	A business not raising enough capital when setting up.
Unincorporated business	A business model in which there is no legal distinction between the owner(s) and the business.
Unlimited liability	A legal status which means that business owners are liable for all business debts.
Business plan	A plan for the development of a business, giving details such as the products to be made, resources needed, and forecasts such as costs, revenues and cash flow.
Cash-flow forecast	The prediction of all expected receipts and expenses of a business over a future time period which shows the expected cash balance at the end of each month.
Cash inflows	The flow of money into a business.
Cash outflow	The flow of money out of a business.
Net cash flow	The difference between the cash inflows and cash outflows in a given period of time.
Solvency	The degree to which a business is able to meet its debts when they are due.

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	Creado por J Brookes hace casi 7 años