3.1 - 3.5 Business Word Scramble
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Term | Definition |
Business angels | wealthy/entrepreneurial investors who risk money in small to medium sized businesses that have high growth potential |
capital expenditure | spending by businesses on fixed assets such as the purchase of land and buildings |
creditors | individuals that the business owes money to |
debentures | long-term loan to a business with the promise of fixed annual interest payments to the debenture holders |
external financing | getting sources of finance from outside the organization |
factoring | financial service whereby a factor (bank) collects debts on behalf of other business in return for a fee |
leasing (hiring) | leasing company owns the equipment and hires it out to the customer |
non-recourse debt factoring | financial service where a debt factor protects its customers against bad debts that they might incur |
overdrafts | allows business to spend in excess of the amount in its account up to a predetermined limit |
revenue expenditure | spending on a day-to-day running of a business |
sources of finance | where or how businesses obtain their funds |
working capital (net current assets) | day to day money that is available for the business |
accounting rate of return | investment appraisal method that calculates the average annual profit of an investment project; expressed as percentage of the initial sum of money invested |
discounted cash flow | investment appraisal technique that reduces the value of money that a business receives in future years |
investment appraisal | financial decision-making tool that helps managers to assess whether certain investment projects should be undertaken based mainly on quantitative techniques |
net present value | investment appraisal technique that calculates the total discounted cash flows, minus the initial cost of the investment project |
payback period | investment appraisal technique which estimates the length of time that it takes to recoup the initial cash outflow of a project |
qualitative investment appraisal | judging whether or not an investment project is worthwhile based on non-numerical factors; intuition rather than scientific decision-making |
quantitative investment appraisal | judging whether or not an investment project is worthwhile based on numerical factors |
assets | items owned by a business that have monetary value; can be fixed or current |
cash | actual money a business has received from selling its products; cash in hand or cash at bank |
cash flow | transfer or movement of money into and out of an organization |
cash flow forecast | financial document that shows the predicted future cash inflows and cash outflows for a business over a trading period |
cash flow statement | financial document that records the actual cash inflows and cash outflows for a business over a specified trading period |
closing balance | value of cash left in a business at the end of the month; closing balance = opening balance plus net cash flow |
current assets | resources that belong to a business that are intended to be used in the next twelve months (cash, debtors, stocks) |
creditors | businesses that have sold goods or services on credit and will collect this money at a future date (accounts payable) |
debtors | private customers or commercial customers who have purchased goods or services on credit and owe the business money (accounts receivable) |
expenses | spending in working capital of a business (costs of productions, salaries, raw materials, rent, advertising) |
liabilities | debts owed by a business |
liquidity | ability of a business to convert assets into cash quickly and without a fall in its value |
liquidity crisis | cash flow emergency situation where a business does not have enough cash to pay its current liabilities |
net cash flow | cash that is left over after cash outflows have been accounted for from the cash inflows |
overheads | costs not directly associated with the production process but necessary for providing and maintaining business operations (lighting, rent, security, insurance) |
stocks (inventories) | physical goods that a business has in its possession for further production |
budget | financial plan for expected revenue and expenditure for an organization for a given period of time |
budget holder | a person who has been placed in charge of a budget |
budgetary control | use of corrective measures taken to ensure that actual performance equals the budgeted performance |
contingency fund | name given to a reserve budget that is set aside for emergency and backup use |
master budget | overall or consolidated budget comprised of all the separate budgets within an organization |
SMART budgeting | budgets that are specficic, measurable, agreed, realistic, and time constrained |
variance | any discrepancy between actual outcomes and budgeted outcomes |
Created by:
randy_gardner
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