1.3

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Created by
rajan

Cards (9)

  • A business uses aims and objectives to guide it's growth
    Aim=Long term aspirations
    Objective=Small targets that must be achieved to reach the aim
  • Business Objectives
    FINANCIAL
    • Survival
    • Sales
    • Profit
    • Market Share
    • Financial Security
    NON-FINANCIAL
    Social entrepreneurship
    Personal satisfaction
    Independence and control
  • Why do businesses have aims and objectives?
    Size=Grow the business
    Industry=Maximise profits, understand different customer needs
    Culture=Incorporate different values, beliefs, vision
    Ownership structure
  • Disposable Income = Money that you can spend without worry
    • If customers have higher disposable income - spend more on expensive products
    • If customers have lower disposable income - spend less, buy cheaper alternatives
    • Business has low disposable income - struggle to pay costs
    • Business has high disposable income - Business has more money to spend
  • Margin Of Safety
    The amount of sales the business can lose before they make a decision.
    ActualSalesβˆ’BreakEvenPointActualSales-BreakEvenPoint
    A) Total Revenue
  • The point at which the profit is at zero
    • When costs fall, the break-even point is lower
    π΅π‘Ÿπ‘’π‘Žπ‘˜πΈπ‘£π‘’π‘›π‘ƒπ‘œπ‘–π‘›π‘‘=𝐹𝑖π‘₯π‘’π‘‘πΆπ‘œπ‘ π‘‘π‘ /(π‘†π‘Žπ‘™π‘’π‘ π‘ƒπ‘Ÿπ‘–π‘π‘’π‘ƒπ‘’π‘Ÿπ‘ˆπ‘›π‘–π‘‘- π‘‰π‘Žπ‘Ÿπ‘–π‘Žπ‘π‘™π‘’πΆπ‘œπ‘ π‘‘π‘ π‘ƒπ‘’π‘Ÿπ‘ˆπ‘›π‘–π‘‘)
  • Cash
    Cash inflows=Money that comes into the business
    Cash outflows=Money that goes out of the business
    Cash flow forecast=Financial document that helps businesses make financial and future decisions
    Net cash flow=How the business manages cash
    (cash inflows-cash outflows)
  • Why is cash important for a businesses survival?
    So that the business can meet it's expenses and costs. Also, have enough money left over to invest in new products, repay investors. Overall, it helps to grow a business.
  • Cash Flow Forecast
    • Complete overview and picture of costs vs revenue and how much money business has and is spending.
    • Found in business plans to show investors so they can get a better understanding of the business