business 0.0 / 5 ? BusinessfinanceASOCR Created by: Lois122Created on: 15-05-17 18:35 What are the short term finances? Overdraft, Loan, Trade credit, Factoring, Hire purchase 1 of 21 What are the medium term finances? Loan, Leasing 2 of 21 What are the long term finances? Loan, Debentures, Issue of shares, Retained profit, Sale and lease back 3 of 21 What are some other sources of finance? Government assistance, Depreciation, Venture capital 4 of 21 What is a Debenture? Only available to PLC's, the business sells a debt so that the business is in debt to them. 5 of 21 What is factoring? When a business sells one of its debts to raise finance. 6 of 21 How do you work out contribution per unit? price - variable costs per unit 7 of 21 How do you work out breakeven? fixed costs/contribution per unit 8 of 21 How to work out payback period? amount left to pay/cash flow of next year x 365 9 of 21 How do you calculate accounting rate of return? profit per year/investment x 100 10 of 21 How do you work out net present value? E(net return x discount factor) -investment 11 of 21 How do you calculate gross profit? sales revenue-cost of sales 12 of 21 How do you calculate operating profit? gross profit - expenses 13 of 21 How do you calculate Profit before tax? operating profit - finance costs 14 of 21 How do you calculate profit for the year (retained profit)? Operating profit - tax and dividends 15 of 21 How do you calculate current ratio? current assets/current liabilities 16 of 21 How do you calculate acid test ratio? current assets - stock/current liabilities 17 of 21 How do you calculate gross profit margin? gross profit/ sales revenue x 100 18 of 21 How do you calculate net profit margin? operating/sales revenue x 100 19 of 21 How do you calculate return on capital employed? operating profit/capital employed x 100 20 of 21 How do you calculate return on equity? profit for the year / share holders equity 21 of 21
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