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Finance
Sources and uses of finance
There are a number of ways of raising finance for a business, below we examine the sources and uses of finance. The type of...
Use of personal income
There are a number of ways of raising finance for a business. The type of finance chosen depends on the nature of the business....
Organisations that provide financial services
Banks like Abbey provide a number of important financial services to businesses:
Loans provide businesses with expansion capital. A secured loan is one that is...
Financial advice, sources of credit and savings and investments
Sources of finance are where finance comes from.
For example,
Bank loans,Owner's (share) capital,Trade credit,
The MFI case study shows how MFI was able to obtain finance...
Investment appraisal
One of the most important long-term decisions for any business relates to investment. Investment is the purchase or creation of assets with the objective...
Contribution and break-even analysis
An important business objective is to break even i.e. to exactly cover your total costs by sales revenue. It is even more desirable to...
Fixed, variable costs and break-even
The break-even point of a business is the level of output or sales at which the revenue received by the business is exactly equal...
Covering the costs of a new product
Costing is an important aspect of production because:
By knowing how much it costs to produce an item or to carry out an activity it...
Costing and profitability
Knowing the cost of an item, or activity makes it possible to calculate the profit of that item or activity. This is very important....
Cost and profit centres
For any business, it is important to have an understanding of how much it costs to run various parts of the company, for example,...
Calculating costs of production
Costing is an important aspect of production because:
by knowing how much it costs to produce an item or to carry out an activity it...
Using a cash flow forecast
A forecast is an estimate of future figures based on experience. You can make forecasts about all sorts of events e.g. the weather, the...
Cash Flow management
Budgets are statements setting out the planned performance of a business type in a table made up of numbers. Usually, these plans deal with...
Budgets and cash flow forecasts
A budget is a plan, which is set out in numbers. It sets out figures that an organisation like a company hopes to achieve...
Analysis of profitability, liquidity and performance
The profit of a business is the difference between its revenues and its costs. It is important to consider two main types of profit:
1.Gross...
The personal budget
A budget is a plan, which is set out in numbers. It sets out figures that an organisation like a company hopes to achieve...
Products that can help you manage your personal finances
Banks provide a number of important financial services to business:
Loans
Provide businesses with expansion capital. A secured loan is one that is guaranteed by some...
Estimating the profit or loss of a business
By law companies are expected to produce financial statements each year. These statements appear in Company Reports.
There are two main financial statements:
1.The profit and...
Using a budget
A budget is a plan, which is set out in numbers. It sets out figures that an organisation like a company hopes to achieve...
Calculating the profit or loss of a business
Two of the most important financial statements for a business are the Profit and Loss Account, and the Balance Sheet. The Profit and Loss...
Aims of finance department
The finance department of a business takes responsibility for organising the financial and accounting affairs including the preparation and presentation of appropriate accounts, and...
Accounting principles
Accounting principles involve the recording and interpretation of business activity in figures (recording accounts). Records are kept of business transactions and full sets of accounts...
Financial records and documents
Accounting involves the creation of financial records of business transactions, flows of finance, the process of creating wealth in an organisation, and the financial...
Understanding a balance sheet
The Balance Sheet gives a frozen picture of one instant of time. The other two financial statements show movements over a period of time....
The importance of business accounts
Business accounts are produced to meet the needs of their users. Typical users and the use they make of accounts are shown below:
There are...