Fichas
Finance 1 uint 1 setting up a business
Fichas del conjunto (21)
- 1List three examples of direct costs and three examples of indirect costsMaterials-Labour-Machinery........Management salaries, rent of building, Heating
- 2Define each of the following terms- a)Sales b)Price c)Revenue d)CostsB)Price-How much somebody has paid-by a customer D)Costs-The amount a business pays for manufacturing C) income earned by a business A0 The amount a business gets for units sold
- 3If Tardy Ltd output 30,000 alarm clocks at a total cost of £120,000, what is the average cost of making each clock?TC-Output=AVERAGE COST£4.00
- 4Calculate how much profit a business made in 2008 if it had revenue of £125,000 and costs of £80,000 ?125-80=45 p=rv-C
- 5If a firms revenue is lower than its costs over a period of time , will the firm make a profit or loss?Loss
- 6Give to reasons why a new business needs a source of start up finance?To They need to buy products from suppliers -enough cash to run a business day to day capital To pay suppliers, fund expansion
- 7Name two short term sources of finance , and explain how they work ?Grant-given to qualify small businesses, the princes trust gives local enterprises to start up-trade credit-invoice is useful for small firms
- 8Describe one benefit of a business using a grant over other sources of start up financeThey do not have to pay it back
- 9Explain what is meant by venture capital?When individual or a business invests money into smaller firm and they often take a stake in the ownership of he business
- 10Why might a new or small firm find it hard to raise finance?Cant fund prodjects and are less likely to pay the bank back than larger firms who are up and rnning
- 11Explain two ways that the government helps new business ?A lot to gain, not claiming off the government, gain tax, create employment less benafits-Business plan and training
- 12Describe how it may be beneficial to banks to help new businesses Give two examples of how they do thisThey give out loans and overdrafts, they also give advice to set up the business
- 13Describe how the prince's trust helps young entrepreneursAdvise, grants and interest loans to young entrepreneurs
- 14Explain what each of the following terms means a) Cash Inflow b)Cash Outflow c)Net cash flowa)When a firm sells products,
B) buys materials or pays wages
C) Difference between A and B over a period of time - 15Explain why a cash flow forecast is useful to business?To anticipate problems, liquidity problem (lack of cash) all inflows and outflows - moniter impact
- 16A firm started the month with a bank balance of £2500 and had a net cash flow of £3000 for the month. What was the firms bank balance at the end of the month$5500
- 17What do credit terms tell you?Can effect cash flow
- 18Explain how letting customers pay for goods on credit can affect a firm's cash flowThey could be must arrange short time finance
- 19Dave's Dodgy Motors Ltd is suffering from poor cash flow. Explain three problems that might resultNot enough cash in the business to meet day 2 day expenses, staff may not get paid in time, not be able to take advantage-poor sales []
- 20Explain how over trading can lead to poor cash flowBuys too many raw materials and hires too many staff, it can't pay off its debts, poor business decisions, expand not enough moneys
- 21Give three ways that a business could try to improve cash flowreschedule receipts of income could give less generous terms insist they pay cash-Reschedule payment to suppliers 90 3 carry stock of unsold products