Finance 1 uint 1 setting up a business

Description

Pages 19 to 25
NJW330
Flashcards by NJW330, updated more than 1 year ago
NJW330
Created by NJW330 almost 11 years ago
53
1

Resource summary

Question Answer
List three examples of direct costs and three examples of indirect costs Materials-Labour-Machinery........Management salaries, rent of building, Heating
Define each of the following terms- a)Sales b)Price c)Revenue d)Costs B)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
If 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
Calculate 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
If a firms revenue is lower than its costs over a period of time , will the firm make a profit or loss? Loss
Give 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
Name 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
Describe one benefit of a business using a grant over other sources of start up finance They do not have to pay it back
Explain 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
Why 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
Explain 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
Describe how it may be beneficial to banks to help new businesses Give two examples of how they do this They give out loans and overdrafts, they also give advice to set up the business
Describe how the prince's trust helps young entrepreneurs Advise, grants and interest loans to young entrepreneurs
Explain what each of the following terms means a) Cash Inflow b)Cash Outflow c)Net cash flow a)When a firm sells products, B) buys materials or pays wages C) Difference between A and B over a period of time
Explain why a cash flow forecast is useful to business? To anticipate problems, liquidity problem (lack of cash) all inflows and outflows - moniter impact
A 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
What do credit terms tell you? Can effect cash flow
Explain how letting customers pay for goods on credit can affect a firm's cash flow They could be must arrange short time finance
Dave's Dodgy Motors Ltd is suffering from poor cash flow. Explain three problems that might result Not 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 []
Explain how over trading can lead to poor cash flow Buys too many raw materials and hires too many staff, it can't pay off its debts, poor business decisions, expand not enough moneys
Give three ways that a business could try to improve cash flow reschedule receipts of income could give less generous terms insist they pay cash-Reschedule payment to suppliers 90 3 carry stock of unsold products
Show full summary Hide full summary

Similar

Forms of Business Ownership Quiz
Noah Swanson
Unit 3 Business Studies
Lauren Thrower
Contract Law
sherhui94
AQA Business Unit 1
lauren_binney
Digital Marketing Strategy - The Essentials
Micheal Heffernan
What is Marketing?
Stephanie Natasha
Chapter 18 - Marketing mix(Product & Price)
irene floriane
Market Segementation
Noah Swanson
Business Studies - AQA - GCSE - Business Studies Key Terms
Josh Anderson
Business Marketing
s1500782
3. Enterprise, business growth and size
shlokashetty98