Buss1 Key Terms
BUSS 2 Key Term Definitions
©T Ockenden
Finance:
Budget – A budget is regarded as a goal or a “yardstick”; it’s something a business uses in order to work to, for example: a firm may have budgeted fixed costs of £5000, they aim to either meet this budget or fall below it to operate to the desired level.
Variance – Variance applies to budgets, and it is the difference between the forecasted or budgeted figure, and the actual figure that comes out at the end of a certain review period.
Cash flow forecast – A cash flow forecast is a document that records the expected inflows and outflows of a business.
Overdraft – Short term borrowing from a bank, a business will only take out as much money as it needs in order to cover its daily cash shortfall, because overdrafts are high interest short term finance options and can be required to pay back within 24 hours.
Factoring – Fully named debt factoring, is the process by which the debt factor company buys a percentage of the debt owed to one company by another company or customer (often around 80%). This means although the company owed to will lose 20% of the money, it means that 80% can be with them immediately rather than having to chase for it.
Sale and leaseback – This is where a company will sell an asset off in order to generate short term finance, but they will buy back the asset on a lease basis as in the will pay for it as and when they need it.
Net profit margin – Simply a profit margin is the gap between the prices the unit is sold for and how much it costs to produce it. Net profit margin is worked out by doing net profit over sales turnover x100.
Return on capital – Profit as a percentage of the capital invested in a project.
Profitability – Profitability measures profit against another variable in the business, for example you’ve got net profit margin which is profit in relation to costs, or ROC, which is profit in relation to the capital invested.
Marketing:
Niche
©T Ockenden
Finance:
Budget – A budget is regarded as a goal or a “yardstick”; it’s something a business uses in order to work to, for example: a firm may have budgeted fixed costs of £5000, they aim to either meet this budget or fall below it to operate to the desired level.
Variance – Variance applies to budgets, and it is the difference between the forecasted or budgeted figure, and the actual figure that comes out at the end of a certain review period.
Cash flow forecast – A cash flow forecast is a document that records the expected inflows and outflows of a business.
Overdraft – Short term borrowing from a bank, a business will only take out as much money as it needs in order to cover its daily cash shortfall, because overdrafts are high interest short term finance options and can be required to pay back within 24 hours.
Factoring – Fully named debt factoring, is the process by which the debt factor company buys a percentage of the debt owed to one company by another company or customer (often around 80%). This means although the company owed to will lose 20% of the money, it means that 80% can be with them immediately rather than having to chase for it.
Sale and leaseback – This is where a company will sell an asset off in order to generate short term finance, but they will buy back the asset on a lease basis as in the will pay for it as and when they need it.
Net profit margin – Simply a profit margin is the gap between the prices the unit is sold for and how much it costs to produce it. Net profit margin is worked out by doing net profit over sales turnover x100.
Return on capital – Profit as a percentage of the capital invested in a project.
Profitability – Profitability measures profit against another variable in the business, for example you’ve got net profit margin which is profit in relation to costs, or ROC, which is profit in relation to the capital invested.
Marketing:
Niche