business

Capital expenditure

Investment in long term. Longer than 12 months. Factories, technology, production equipment.

Fixed asset

Item or property that the business plans on using longer than a year.

Revenue expenditures

Spending on company’s general costs. Day to day, less than a year. Utility bills, wages, paying suppliers, tax bills

Internal sources of finance

Personal funds, retained profits, sale of assets

Personal funds

Owner saca dinero de su wallet para el business

Retained profit

Ahorra con el tiempo del dinero del business

Sale of assets

Venden los assets, puede ser fixed o intangible.

Intangible assets

Patents or brand names

External sources of finance

Equity finance, debt finance, other sources of finance

Equity finance

Provider receives part ownership of business in exchange of finance. Business angel, venture capital, share capital

Business angel

Wealthy businessman invests money in new businesses. Shark tank

Venture capital

Companies (group of investors) does the same as business angels

Share capital

How much money a company has raised through selling ownership stakes to the stock market

Debt Finance

Money borrowed from bank or other places. Loan capital, overdrafts, microfinance, trade credit

Loan Capital

Used to buy fixed assets, must be repaid with interests

Overdrafts

Cuando sacas más dinero del que tienes, pero lo tienes que repay

Microfinance

para los que no tienen access a traditional banking, en low income o developing regions

Trade credit

receives goods and services from suppliers immediately, but paying them back later.

Other forms of finance

Leading capital equipment, crowdfunding

Leasing

Renting a fixed assets, rather than buying it

Crowdfunding

Many people invest small amounts of money to fund a business or project

Cómo se saca el profit

Revenue-cost

Variable costs

Depends directly on production. Materials, packaging, delivery etc

Fixed costs

Stays the same sin importar el output. Rent, equipment, wages, advertising. No afecta directamente el producto

Total costs

Variable cost + fixed costs

Semi-variable costs

Both variable and fixed costs. Example: electricity in coffee shop, se necesita electricidad para el espresso machine, pero también para la luz, refri etc.

Direct costs

Directly linked to the sale of goods or services. Store employees, goods sold, store overheads, store maintenance

Indirect costs

Es la company en general, los headquarters. Head office, national advertising, board members salaries.

Revenue

Lo que el business gana en general, vendiendo goods and services

Total revenue=

Price • quantity

Revenue streams

A specific way that the company generates income. En los cines, venden comida, movie related products, y los boletos.