Flash cards Business finance

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Last updated 9:03 PM on 5/13/26
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24 Terms

1
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Gross profit

The money that a company makes before the direct costs, Raw materials, Labor, Manufacturing supplies

<p>The money that a company makes before the direct costs, Raw materials, Labor, Manufacturing supplies </p>
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Revenue

the money that comes into the business from selling goods or services

<p>the money that comes into the business from selling goods or services</p>
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Net current assets

The money available in the business to fund day to day payments

<p>The money available in the business to fund day to day payments</p>
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Break even

To sell enough so you can cover all your costs

<p>To sell enough so you can cover all your costs</p>
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Net assets

What the owners of a business will fully keep after paying it’s liabilities, Owes

<p>What the owners of a business will fully keep after paying it’s liabilities, Owes</p>
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Cost of goods sold

The money producing the goods for a business, Materials, Labor, Manafacturing overhead

<p>The money producing the goods for a business, Materials, Labor, Manafacturing overhead</p>
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Net cash flow

The money coming in and out of a business

<p>The money coming in and out of a business </p>
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Net book value

The value of a product after its value has decreased, Original cost of product

<p>The value of a product after its value has decreased, Original cost of product</p>
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Profit

The money left after all expenses money you keep

<p>The money left after all expenses money you keep</p>
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Liquid capital ratio

Business can pay it’s short-term obligations using assets that can quickly be turned into cash

<p>Business can pay it’s short-term obligations using assets that can quickly be turned into cash</p>
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Trade payable days

Shows how long a business takes to pay for goods or services brought on credit

<p>Shows how long a business takes to pay for goods or services brought on credit</p>
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Trade receivable days

Money that is owed to a business by its customers for goods or services sold on credit

<p>Money that is owed to a business by its customers for goods or services sold on credit</p>
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Opening inventory

The value of stock a business has at the beginning of an accounting period

<p>The value of stock a business has at the beginning of an accounting period</p>
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Reducing balance method

Where an asset value goes down faster at first, then slower at time

<p>Where an asset value goes down faster at first, then slower at time</p>
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Straight line depreciation

The asset looses the same amount of value each year

<p>The asset looses the same amount of value each year</p>
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Gross profit margin

How much money a business keeps from sales before other expenses

<p>How much money a business keeps from sales before other expenses</p>
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Profit/loss for the year

The money a business actually keeps or looses over the year after paying all its costs

<p>The money a business actually keeps or looses over the year after paying all its costs</p>
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Current ratio

Wether a business can pay its short term obligations with current assets, Cash, Inventory, accounts receivables

<p>Wether a business can pay its short term obligations with current assets, Cash, Inventory, accounts receivables</p>
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Mark-up

Amount added to the cost of price of a product to determine it’s selling price

<p>Amount added to the cost of price of a product to determine it’s selling price</p>
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Profit Margin

How much money a business gets to keep from each £1 of sales

<p>How much money a business gets to keep from each £1 of sales</p>
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Inventory turnover

How quickly a business will sell its Inventory

<p>How quickly a business will sell its Inventory </p>
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Average inventory

Typical amount of stock a business will have

<p>Typical amount of stock a business will have </p>
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Return on capital employed

How much money you make from all the money invested in the business

<p>How much money you make from all the money invested in the business </p>
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Capital employed

Total money invested in a business to make profit

<p>Total money invested in a business to make profit </p>