GCSE Business Studies Finance TERMS This is a

GCSE Business Studies Finance - TERMS This is a cost that does not change with the amount the firm is producing or selling. Usually expressed in terms of an amount per time (week, Month etc). This can change over time…e. g. the insurance, rent or rates can change BUT not with the amount sold.

GCSE Business Studies Finance - TERMS Money owed which does not have to be paid back within the next year…a long term bank loan, company stock, debentures.

GCSE Business Studies Finance - TERMS An amount owing that the business will have to repay in the next year…e. g. an overdraft (repayable when asked for by the bank) trade credit (usually one month).

GCSE Business Studies Finance - TERMS The output at which the firm stops making losses and is about to begin making a profit. It is where the turnover = total cost. You should be able to draw a simple diagram and shade in the areas of profit and loss.

GCSE Business Studies Finance - TERMS Security for a long term loan from a building society or bank which is used to buy property (or machines). The lender has first claim on the sale of the property up to the point it has got its loan and interest repaid.

GCSE Business Studies Finance - TERMS Gross Profit x 100 Turnover

GCSE Business Studies Finance - TERMS This has to be held by the company every year. It gives shareholders a chance to vote about what the company is doing.

GCSE Business Studies Finance - TERMS Bank overdraft Trade Credit Debt Factoring

GCSE Business Studies Finance - TERMS This is the total sales revenue of the firm. It is the number of items sold x the price charged per item.

GCSE Business Studies Finance - TERMS The original owners sell these to raise the money for the business…the buyers have not made a loan to the company but have bought a piece of it. They can vote about what happens and are entitled to the profits. People can sell these on the stock exchange…prices do vary so there is a risk of loss.

GCSE Business Studies Finance - TERMS These may be given by government to encourage a firm to invest…not a loan as it doesn’t need to be repaid.

GCSE Business Studies Finance - TERMS If you buy these in a company you don’t become a shareholder and get no cut of profit and no say in how the company is run. You would get an interest rate on the money you have loaned plus a guarantee about when the money will be repaid…you can always sell these at an exchange if you want the money back sooner… though you might get a lower price…there is a risk.

GCSE Business Studies Finance - TERMS These are assets which the business has in the form of cash in its tills/ bank or items which will soon become cash…e. g. stocks of goods or debtors (people that owe the business money).

GCSE Business Studies Finance - TERMS Bank loan Hire Purchase Leasing

GCSE Business Studies Finance - TERMS This is an estimate or prediction about how a business thinks that money will come in and how it will leave the business. The main aim is to identify times when the business is likely to be short of money…this is a risky time as the business could easily become bankrupt if it is unable to pay its bills. Usually the business will have an overdraft to cover these times.

GCSE Business Studies Finance - TERMS This is where profit is put back into the business rather than being given as a dividend to the shareholders.

GCSE Business Studies Finance - TERMS Sometimes known as profit percentages.

GCSE Business Studies Finance - TERMS This shows the assets (resources owned by the business) and the liabilities (amounts owing by the business…including the money put in by the owners).

GCSE Business Studies Finance - TERMS This is the account in which the gross and net profit of the business are worked out…it normally covers one year of trading.

GCSE Business Studies Finance - TERMS This is where a business needs money for a short period of time and will soon be able to repay it e. g. borrowing to pay wages because the goods made should be sold quickly and the business will get the money back in a short time e. g. overdraft and trade credit.

GCSE Business Studies Finance - TERMS These are costs that change directly with the amount being produced or sold by the firm…e. g. raw materials, delivery charges.

GCSE Business Studies Finance - TERMS A cost which usually has to be paid when a firm borrows money.

GCSE Business Studies Finance - TERMS These are made up of the retained profits of the business over time …and are used by it to keep the company going or to expand.

GCSE Business Studies Finance - TERMS This type of profit is the Gross Profit minus the expenses (overheads) of the business. Suppose a shop has overheads of £ 9000, then the type of profit in question would have been £ 6000: £ 15000 gross less £ 9000 overheads = £ 6000 of this type of profit.

GCSE Business Studies Finance - TERMS The current assets minus the current liabilities…most businesses would like the current assets to be twice as big as the current liabilities.

GCSE Business Studies Finance - TERMS The part of the profit paid to the shareholders…usually expressed as pence per share…e. g. 5 p per share means that you will get 5 p for every share you own.

GCSE Business Studies Finance - TERMS This is another name for a fixed cost.

GCSE Business Studies Finance - TERMS Same as turnover

GCSE Business Studies Finance - TERMS Net Profit × 100 Turnover If this was 12% then the business would be keeping 12 p from every £ of sales.

GCSE Business Studies Finance - TERMS Someone who the business owes money to…often a supplier who allows one month’s credit on the stock delivered. It is not usual to be charged interest on such trade credit.

GCSE Business Studies Finance - TERMS Those amounts which are owed by a business to others.

GCSE Business Studies Finance - TERMS The amount of money which has been put into the business…either by the owners/ shareholders or been borrowed by the business.

GCSE Business Studies Finance - TERMS People who owe money to a business…if they are unable to pay in the end then the debt will have to be forgotten about…it becomes a bad debt. Businesses obviously need to be careful who they give credit to.

GCSE Business Studies Finance - TERMS Turnover minus the cost of the goods sold e. g. a retailer buys in stocks of clothes for £ 20000 and sells them for £ 35000…the profit in question on these sales would be £ 15000.

GCSE Business Studies Finance - TERMS Profit made which has not been given to the shareholders as a dividend payment.

GCSE Business Studies Finance - TERMS Items which are owned and will stay in the business over a long time … e. g. machines, tills, counters, delivery vans etc.

GCSE Business Studies Finance - TERMS This is what a firm will charge its customers for the goods or service being sold.

GCSE Business Studies Finance - TERMS Shown in the balance sheet. This is the amount of money that belongs to or is put into the business by the shareholders.

GCSE Business Studies Finance - TERMS These are items that are owned by a business.

GCSE Business Studies Finance - TERMS Fixed cost plus the variable cost.