business 1.3

1.3 Key words

Sales Turnover- The amount of income recieved from selling goods or serivces over a period of time
Sales volume- the number of items or products or serivces sold by a business over a period of time.

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Fixed costs- costs which do not vary with the output produced such as rent, buisness rates, advertising costs, administration costs and saleries.
Total costs- all the costs of a buisness; it is equal to fixed costs plus variable costs.
Veriable costs- costs which change directly with the number of products made by a business such as the cost of buying raw materials

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Profit- occurs when the revenue of a business are greater than its costs over a period of time.
Loss- occurs when the revenue of a business are less than its costs over a period of time.

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Net cash flow-the recipients of a business minus its payments.
insolvency- when a busniess can no longer pay its debts.
cash flow forecast- a prediction of how cash will flow through a business in a period of time in future.
opening balance- the amount of money in a business at the start of a month.
closing balance= the amount of money in a business at the end of a month.
cumulative cash flow- the sum of cash that flows into a business over time.

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trade credit- where a supplier gives a customer s period of time to pay a bull (or invoice) for goods or services once they have been delivered.
stocks-materials that a business holds. some could be materials waiting to be used in the production process and some could be fnished stock waiting to be delivered to customers.
Business plan-a plan for the development of a business giving forecasts of items such as sales, costs and cash flow.

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Long ter finance- sources of money for businesses that are borrownes or invested typicalls for more than a year.
short term finance- sources of money for businesses that may have to be repaid either immedietly or fairly quickly, such as an overdraft, usually within a year.
share- a part ownership owning 25 per cent of the shares of a business owns a quater of the business.

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