Unit 5 Finance

  • Created by: Howwise
  • Created on: 15-11-21 21:50
View mindmap
  • Finance Unit 5
    • 5.1 The role of the finance function
      • The purpose of the finance function
        • Provide financial information, support business planning and decision making
    • 5.2 Sources of finance
      • The reasons businesses needs finance
        • Establishing a new business, funding expansion, to run the business recruitment, marketing
      • Ways of raising finance
        • Loan, overdraft, trade credit, retained profit, sale of assets, owners’ capital, new partner, share issues, crowdfunding
    • 5.3 Revenue, costs, profit and loss
      • The different costs in operating a business
        • Fixed, variable, total
      • Calculation of profit/loss
        • Gross profit, net profit
      • Calculation and interpretation of profitability ratios
        • Gross profit margin, net profit margin
      • Average Rate of Return .
    • 5.4 Break-even
      • The concept of break-even
      • The usefulness of break-even in business decision making
        • Informs marketing and planning decisions
      • Break even quantity = Fixed Cost / Selling price - Variable Cost
      • Contribution per unit = Selling price - Variable Cost
    • 5.5 Cash and cash flow
      • The importance of cash to a business
        • Providing liquidity, enables business to meet shortterm debts/expenses
      • The usefulness of cash flow forecasting to a business
        • Planning tool, anticipates periods of cash shortage, enables remedies to be put in place for shortages, provides targets
      • Net Cash flow = Total inflow - Total outflow.
      • Closing Balance = Net cashflow + Opening Balance


No comments have yet been made

Similar Business Studies resources:

See all Business Studies resources »See all Finance resources »