finance

• cash flow is the money that flows in and out on a day to day basis
• net cash flow is the difference between money in and money out
• cash is money that the business has in cash or at the bank
• cash flow forecast is a financial planning tool that estimates the money coming in and out. allows the business to predict times when additional finance may be needed to maintain liquidity
• break even chart is the point at which the business' total sales equals the total costs.
• closing balance is the amount that remains in the account at the end of an accounting period
• competitvie pricing is setting the price of a product at a level that is competitive with other products in the market
• internal sources of finance is money available from WITHIN the business e.g. retained profits
• owners' funds is money put into a business by its owner(s)
• interest is a payment made in order to borrow money. Business pays back more than it borrows
• assest is something that is owned by a business e.g. land
• trade credit is a period of time which suppliers allow customers before payment for supplies has to be made
• external source of finance is money that comes from OUTSIDE a business e.g. a loan
• collateral is an asset that a bank holds as security for the repayment of loan
• mortgage is loans from banks or building societies that are used to buy land and buildings
• overdraft is a flexible loan which businesses can use whenever necessary, up to agreed limit
• cash flow statement is a record of the cash inflows and outflows that took place over an earlier period of time
• investment takes place when a business buys an asset in the hope of making a profit from it's use
• margin of safety measures the amount by which a business's current level of production exceeds its break even level of output
• an income statement is a financial statement showing a business's revenues and costs and profit or loss over a period of time
• a liability is a sum of money that is owed by a business to another business or person
• non-current assets are assets that are not expected to be used up within a year.
• current assets are assets that are expected to be converted into cash within one year.
• total equity is the part of a company's money that belongs to shareholders
• statement of financial position shows the assets and liabilities of a business on a particular day