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Monitoring A Busines
Chapter 11
| Term | Definition |
|---|---|
| PROFITABILITY | 1. Gross Profit Margin 2. Net Profit Margin 3. Return On Capital Employed |
| LIQUIDITY RATIOS | 1. Working Ratio 2. Asset Test Ratio |
| DEBT/EQUITY RATIOS | Examines the types of long term finance or capital used by the firm |
| TRADING PERIOD | 12 months the accounts are done for (Usually from 1st Jan-31st Dec) |
| COST OF SALES | Cost of purchases |
| DIVIDEND | Money paid regularly by a company to its shareholders out of its profits |
| RETAINED EARNINGS | Profits kept in a business for the future |
| FIXED ASSETS | Assets owed for more than one year |
| CURRENT ASSETS | Assets that change in value often |
| CURRENT LIABILITIES | Short term debts |
| DEBTORS | People who owe you money from credit sales |
| WORKING CAPITAL | The capital of a business which is used in its day-to-day trading operations, calculated as the current assets minus the current liabilities. |
| EQUITY CAPITAL | Total invested by shareholders |
| CAPITAL EMPLOYED | Total long term finance |
| AUTHORISED CAPITAL | Total shares that may be issued |
| ISSUED CAPITAL | Finance provided by shareholders |
| LIQUID ASSETS | Assets that are easily turned into cash |
| FINAL ACCOUNTS | 1. Trading Profit And Loss 2. Balance Sheet |
| ROI | Return On Investment |
| ROCE | Return On Capital Employed |
Created by:
EmmaD98
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