Finance key terms for PBF Unit 2 by Dan Bevan

What is a balance sheet?

2014-12-05 09:07:48 UTC

a statement of the assets, liabilities, and capital of a business or other organization at a particular point in time, detailing the balance of income and expenditure over the preceding period.

Bilal - What is a Fixed Cost??

2014-12-05 09:07:58 UTC

A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses that have to be paid by a company, independent of any business activity. It is one of the two components of the total cost of a good or service, along with variable cost.

Ahmet :

2014-12-05 09:08:00 UTC

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Yosef Alshariff / Fixed Assets

2014-12-05 09:08:05 UTC

assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land, buildings, and equipment.

Qadir - Liability

2014-12-05 09:08:09 UTC

Liability include loans, accounts payable, mortgages, deferred revenues and accrued expenses. Liabilities are a vital aspect of a company's operations because they are used to finance operations and pay for large expansions.

SAV THE MAN - what is total revenue?

2014-12-05 09:08:10 UTC

Total revenue is the total receipts of a firm from the sale of any given quantity of a product.

total revenue = price × quantity

Variable cost- costs which change with output e.g raw materials

2014-12-05 09:08:38 UTC

Jake Smith - Budgets

2014-12-05 09:08:51 UTC

An estimation of the revenue and expenses over a specified future period of time.

A budget can be made for a person, family, business or government. :)

Farhan - Break even

2014-12-05 09:09:46 UTC

An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue.

What does Margin of safety mean in Break Even analysis?

2014-12-05 09:09:49 UTC

In break-even analysis, margin of safety is the extent by which actual or projected sales exceed the break-even sales

tamyra depreciation

2014-12-05 09:11:02 UTC

a reduction in the value of an asset over time, due in particular to wear and tear.

Jamie- What is a cash flow forecast?

2014-12-05 09:11:33 UTC

Estimate of the timing and amounts of cash inflows and outflows over a specific period (usually one year). A cash flow forecast shows if a firm needs to borrow, how much, when, and how it will repay the loan.

rainbow- profit and loss account

2014-12-05 09:11:38 UTC

a financial statement showing a company's net profit or loss in a given period

Ateeb:what is return on captial employed

2014-12-05 09:13:06 UTC

Capital employed is the total of all the long term finance of the business for example:

Owners capital invested from the start of the year+ net profit of the year - drawings + long term liabilities

Current assets

2014-12-05 09:13:31 UTC

cash and other assets that are expected to be converted to cash within a year.

Working Capital:

2014-12-05 09:15:23 UTC

The cash available for day-to-day operations of an organisation. Strictly speaking, one borrows cash (and not working capital) to be able to buy assets or to pay for obligations. Also called current capital.