Flashcards
THEME 2 : Managing Finance
Flashcards do conjunto (29)
- 1PROFITSALES REVENUE - TOTAL COSTS
- 2GROSS PROFITSALES REVENUE - COST OF SALES
- 3OPERATING PROFITGROSS PROFIT - OTHER OPERATING EXPENSES
- 4PROFIT FOR THE YEAR (NET PROFIT)OPERATING PROFIT - INTEREST AND TAXATION
- 5COST OF SALESCOSTS DIRECTLY LINKED TO THE PRODUCTION OF THE GOODS AND SERVICES SOLD EG. RAW MATERIALS
- 6EXCEPTIONAL ITEMSANY UNUSUALLY LARGE OR INFREQUENT TRANSACTION
- 7STATEMENT OF COMPREHENSIVE INCOME (PROFIT AND LOSS ACCOUNT)A FORMAL FINANCIAL DOCUMENT THAT SUMMARISES A BUSINESS' TRADING ACTIVITIES AND EXPENSES TO SHOW WHETHER THE BUSINESS HAS MADE A PROFIT OR LOSS.
- 8PROFITABILITYPROFITABILITY MEASURES THE EFFICIENCY OF A BUSINESS IN GENERATING PROFIT. THEY CAN BE MEASURED THROUGH PROFIT MARGINS, THESE MEASURE PROFIT AS A PERCENTAGE OF SALES REVENUE.
- 9GROSS PROFIT MARGINGROSS PROFIT
___________________ X 100
REVENUE - 10OPERATING PROFIT MARGINOPERATING PROFIT
__________________ X 100
REVENUE - 11PROFIT FOR THE YEAR (NET PROFIT) MARGINNET PROFIT
_________________ X 100
REVENUE - 12STATEMENT OF FINANCIAL POSITION (BALANCE SHEET)A BALANCE SHEET IS A FINANCIAL STATEMENT THAT SHOWS THE ASSETS, LIABILITIES AND CAPITAL OF A BUSINESS ON A PARTICULAR DATE.
- 13LIQUIDITYTHE PROPORTION OF A BUSINESS'S ASSETS THAT ARE HELD IN A FORM EASILY CONVERTED INTO CASH.
- 14CURRENT RATIO FORMULACURRENT ASSETS
______________________ : 1
CURRENT LIABILITIES - 15ACID TEST RATIO FORMULACURRENT ASSETS - INVENTORY
______________________________________ :1
CURRENT LIABILITIES - 16WORKING CAPITALTHIS IS THE AMOUNT OF MONEY AVAILABLE FOR THE DAY TO DAY RUNNING OF THE BUSINESS. A NEGATIVE FIGURE CAN BE A PROBLEM FOR SOME BUSINESSES THAT MAY NEED TO PAY FOR OUTSTANDING DEBTS BUT, DO NOT HAVE ENOUGH SPARE CASH TO DO SO.
- 17ASSETSOWNED BY THE BUSINESS OR OWED TO THE BUSINESS
- 18LIABILITIESAN INDIVIDUAL OR THE BUSINESS OWES MONEY TO SOMEONE/ANOTHER BUSINESS. IT ALSO SHOWS THE SOURCE OF CAPITAL THE BUSINESS HAS RAISED IN ORDER TO PURCHASE ITS ASSETS.
- 19NON -CURRENT ASSETSASSETS THEY EXPECT TO RETAIN FOR MORE THAN ONE YEAR EG. LAND, PROPERTY AND MACHINERY
- 20CURRENT ASSETSASSETS THAT ARE LIKELY TO BE CONVERTED INTO CASH BY THE NEXT BALANCE SHEET EG. CASH INVENTORIES (STOCK) & RECEIVABLES (DEBTORS)
- 21CURRENT LIABILITIESDEBTS THAT WILL BE PAID WITHIN ONE YEAR OR LESS EG. TRADE CREDIT (PAYABLES)
- 22LONG TERM(NON-CURRENT) LIABILITIESDEBTS THAT WILL TAKE LONGER THAN ONE YEAR TO PAY OFF EG. BANK LOANS AND MORTGAGES
- 23TOTAL EQUITYTHIS IS THE ASSETS (USUALLY CASH) RECEIVED FROM THE SHAREHOLDERS
+
ANY PROFITS MADE BY THE COMPANY THROUGH TRADING THAT REMAINS UNDISTRIBUTED.
= NET ASSETS - 24NET CURRENT ASSETS (LIABILITIES)CURRENT ASSETS - CURRENT LIABILITIES
KNOWN AS WORKING CAPITAL. - 25NET ASSETS(CURRENT + NON CURRENT ASSETS)
-
(CURRENT + NON CURRENT LIABILITIES) - 26ACID TESTMEASURES THE VERY SHORT TERM LIQUIDITY OF A BUSINESS. MORE ACCURATE THAN THE CURRENT RATIO AS INVENTORIES CAN TAKE TIME TO SELL
- 27CURRENT RATIOMEASURES THE ABILITY OF A BUSINESS TO MEET ITS LIABILITIES IN THE NEXT YEAR OR SO.
- 28LIQUIDITYTHE ABILITY OF A BUSINESS TO PAY ITS DEBTS
- 29WORKING CAPITAL (TUTOR2U)THE AMOUNT OF MONEY THAT A BUSINESS HAS AVAILABLE
Informações
- Descrição
- Profit and Liquidity
- Criado por
- Libby Rose · mar 2016
- Atualizado
- 25 mai 2016
- Visualizações
- 18
- Tags
- Avaliação