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Conor LC Bus U4 Pt2
Key terms LC Bus Unit4 Part2 Tax, Finance
| Term | Definition |
|---|---|
| direct tax | any tax calculated on one's income |
| indirect tax | any tax calculated on one's spending |
| value added tax (VAT) | inderect tax on goods & services purchased: main rate reduced from 23% to 21% in Sep 2020 |
| capital gains tax (CGT) | tax of 33% on any profit made from selling an asset |
| capital acquisitions tax (CAT) | tax of 33% on gifts & inheritances above a certain level |
| customs duty | tax on goods/services bought outside the EU |
| excise duty | sin' tax on certain goods (alcohol tobacco petrol sugar) |
| carbon tax | a tax on carbon fuels (increased from €26 to €33.50 per tonne in 2021). |
| Pay Related Social Insurance (PRSI) | tax paid by both employers & employees to fund social services |
| Pay As You Earn (PAYE) income tax | Irish progressive income tax deducted from wages/salary by employer |
| self-assessment income tax | Irish income tax for self-employed workers (non-PAYE) |
| Universal Social Charge (USC) | additional income tax introduced to help with government deficits |
| Deposit Interest Retention Tax (DIRT) | tax on interest earned in savings accounts : 33% as of 2020 |
| Local property tax (LPT) | homeowners tax based on the value of the property to fund local services |
| corporation tax | tax on company profits (12.5% ) very low compared to EU partners |
| commercial rates | a local commercial property tax which part funds local authorities |
| progressive tax | tax in which the rate increases as the taxable amount increases |
| regressive tax | flat rate tax that hits lower earners harder because they have less disposable income |
| tax credits | credits awarded by Revenue to individuals/families that reduces the overall tax due. |
| tax evasion | an illegal activity in which a person or firm deliberately avoids paying a true tax liability. |
| tax avoidance | the legal use of the tax system to one's own advantage to reduce the amount of tax that is payable |
| cash flow forecast | a projection of a firm's future financial position based on anticipated income and expenditure. |
| deficit | when income is less than expenditure |
| surplus | when income is more than expenditure |
| bank overdraft | the extension of credit from a bank when an account reaches zero |
| accrued expenses | an accounting term that refers to an expense that is recognized on the books before it has been paid |
| factoring | a financial transaction in which a business sells its accounts receivable (i.e. |
| trade credit | the loan extended by one company to another when goods/services are bought on credit. |
| hire purchase | when one pays for a thing in regular instalments while having the use of it |
| leasing | long-term rental |
| mortgage | house loan |
| retained earnings | the amount of income left over for the business after it has paid out dividends to its shareholders |
| equity capital | funds paid into a business by investors in exchange for stock/shares. |
| grants | government money to a business; doesn't need to be repaid. |
| debenture | a company IOU (long-term) to investors that get a fixed rate of interest as a reward |
| sale & leaseback | a company-owned asset that is sold to someone else and then leased back to the first owner for a long duration. |
| venture capital | capital invested in a project where there is substantial risk |
| collateral/security | something pledged as security for repayment of a loan |
| current account | account used for day-to-day uses; doesn't pay interest on credit balance |
| deposit account | savings account; pays interest on balance |
| standing order (SO) | an instruction to a bank by an account holder to make regular fixed payments to a particular person/business. |
| direct debit | an arrangement made with a bank that allows a third party to transfer money from a person's account on agreed dates |
| profit & loss account | a financial statement that shows the financial performance of a firm over a given time period. |
| gross profit | profit after deducting costs directly related to its production |
| net profit | profit after all costs have been deducted; admin |
| balance sheet | a 'snapshot' of the value of a company's assets and liabilities at a given date. |
| fixed assets | long-term assets of a company |
| current assets | aliabilities that will fall due in a year; includes bank overdraft- creditors. |
| current liabilities | assets that will be used up in a year; includes inventory- cash- debtors |
| creditors | firms that have supplies goods/services but have not been paid for yet. |
| working capital | the difference between current assets and current liabilities. |
| capital employed | total assets (fixed & current) - current liabilities |
| ratio analysis | using financial data to measure key performance indicators of a company |
| net profit margin | the ratio of net profit to revenue for a company typically expressed as a percentage |
| gross profit margin | the ratio of gross profit to revenue for a company typically expressed as a percentage |
| return on investment (ROI) | a ratio between net profit and cost of investment. Measures overall profitability for an investor. |
| liquidity | the ease with which an asset can be converted into ready cash. |
| current (working capital) ratio | a liquidity ratio that measures a company's ability to pay short-term obligations; CA/CL |
| acid (quick) ratio | a company's capacity to pay its current liabilities without needing to sell its inventory; (CA-Inventory)/CL |
| solvency | the ability of a company to meet its financial obligations. |
| gearing | the extent to which a firm's operations are funded by lenders versus shareholders |
| debt capital | bank loans |
| debt/equity ratio | ratio that shows the level of gearing (the use of debt capital) to finance operations. |
| liquidation | the process of bringing a business to an end by selling off its assets. |
| recievership | a court-appointed tool that can help troubled companies to avoid bankruptcy. |
Created by:
conorok
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