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Monitoring Business
Leaving Cert. Business
| Term | Definition |
|---|---|
| Accounting | is a process of collecting, recording, communicating and analysing of all financial aspects of a firm’s activities.= |
| Profit and Loss | This calculates the profit that the business makes in a year.= |
| Falling gross profit: | a low gross profit tells the managers that their prices are too low (selling price).= |
| Dividends and reinvest: | the size of the net profit tells managers how much they can afford to pay out as dividends to shareholders.= |
| Balance Sheet. | The purpose of the Balance Sheet is to show the business’s financial position.= |
| Fixed Assets: | the value of the business’s fixed assets tells managers whether the business has enough security to offer a bank when applying for a loan. This is called collateral= |
| Working Capital: | this figure tells the managers whether the business has enough cash available to pay any bills which may arise in the future.= |
| Financed by: | this section tells managers whether the business will be able to take out any more loans in ‘financed by’,.= |
| Profitability Ratio: | These examine whether profit made by the business is a good or bad for the size of the business. = |
| Capital Employed | = Issued share capital + reserves (retained earnings) + long-term loan (debenture).= |
| The Irish Government | will give you 5% if you invest with it (Government bonds) and there is no risk of losing your money. So the business’s ROI should be much higher than this given the risk involved.= |
| Employees | are interested in the profitability of a business.= |
| Shareholders | would be interested in the amount of dividend payable depending on the net profit of the business.= |
| Liquidity: | This examines whether the business has enough cash available to pay it’s short-term debts as they fall due. |
| = |
Created by:
athlonebusinessstudies
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