Cash Flow Concepts

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Which of the following is NOT a type of business objective?

Profit
Social Objective
Market Share
Employee Satisfaction (correct)

Variable costs are costs that change depending on the number of products or services sold.

True (A)

What is the difference between fixed costs and variable costs?

Fixed costs remain constant regardless of the number of products or services produced or sold, while variable costs change directly with the volume of production or sales.

The ______ is a financial statement that shows the amount of money earned and spent during a specific period, resulting in profit or loss.

income statement Signup and view all the answers

Match the following terms to their definitions:

Market Share = The proportion of sales in a market taken by one business. Profit = The amount of revenue left over after costs are deducted. Viable = Capable of succeeding. Break Even Point = The point where a business's revenue matches its total costs. Margin of Safety = How much sales can fall before the business's break-even point is reached again. Signup and view all the answers

What is the formula for calculating Gross Profit?

Sales Revenue - Cost of Sales (B) Signup and view all the answers

The Break-Even Point is achieved when total revenue is equal to total costs.

True (A) Signup and view all the answers

What does the Contribution represent in financial terms?

Price - Variable Costs Signup and view all the answers

The formula for calculating Net Cash Flow is _ minus _.

Cash Inflows, Cash Outflows Signup and view all the answers

Match the following financial terms with their definitions:

Revenue = Total income from sales before any costs are deducted Total Costs = Sum of fixed and total variable costs Net Profit = Profit remaining after all expenses have been deducted Closing Balance = Final amount of cash available at the end of a period Signup and view all the answers

What does a positive cash flow indicate?

More money coming in than going out (D) Signup and view all the answers

Insolvent businesses are able to pay all their debts.

False (B) Signup and view all the answers

What is the term for the cash that comes into the business?

cash inflows Signup and view all the answers

The closing balance is the amount of money in the bank at the end of each ______.

month Signup and view all the answers

Which of the following is considered a short-term source of finance?

Overdraft (D) Signup and view all the answers

Trade credit is only available to individual consumers.

False (B) Signup and view all the answers

What are funds obtained from a large number of people, each contributing a small amount, called?

Crowdfunding Signup and view all the answers

A ___ is a check on the financial status to ensure the borrower can repay a loan.

Credit Check Signup and view all the answers

Match the following sources of finance with their descriptions:

Personal Savings = Money saved by the entrepreneur Loans = Amount lent with interest Venture Capital = Investment from large businesses to start-ups Share Capital = Investments made by shareholders Signup and view all the answers

Flashcards

Credit

The amount of money that a financial institution or supplier will allow a business to use, which it must pay back in the future at an agreed time.

Cash Inflows

All of the money that comes into the business.