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Finance


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Profit
Revenue - Costs
Loss
When revenue is less than costs
Costs
The expenses a business pays for in producing goods and services
Revenue
The amount of money a business receives from selling goods or services
Cash
Money that the business has available to it straight away (e.g. in Bank account)
Forecast
A technique where the business attempts to estimate future sales
Cash Flow
Money flowing into and out of a business
Cash-flow Forecast
A prediction of a the company's future flows
Cash-flow Crisis
When there is insufficient cash to pay immediate bills
Cash-flow Statement
Flows that took place in the past
Net Cash-flow
Difference between cash in and out of a business over a time period
Opening Balance
Business' money at the start of the month (Closing balance from previous month)
Closing Balance
The amount of cash the business has at the end of each month
Overdraft
Bank permission to withdraw more from an account than is deposited
Owners' Funds
The money that the owners already have
Retained Profit
Profit kept by the business to help financial growth
Venture Capitalists
Private investors willing to risk money on new businesses
Breakeven
Where Costs = Revenue and the business is making neither a profit nor loss
Fixed Costs
Costs stay the same no matter what level of output
Variable Costs
Costs that vary directly with output
Expenses
The day-to-day running costs of the business (a.k.a. Overheads or Operating costs)
Gross Profit
Total Revenue - Cost of Sales
Net Profit
Gross Profit - Expenses
Rent
The price for land or buildings
Wages and Salaries
The price for labour