Question | Answer |
Liabilities | Debts owed by the business |
Current Assets | Those assets owned by a business and used within a year |
Gross Profit | This is made when sales revenue is greater than the costs of goods sold |
Non Current Assets | Items owned by a business for more than one year |
Current Liabilities | Short-term debt owned by a business |
Working Capital | The finance needed by a business to pay its day-to-day cost |
Net Profit | The profit made by a business after all costs have been deduced from sales revenue |
Depreciation | The fall in value of a fixed asset over time |
Trading account | Shows how the gross profit of a business is calculated |
Assets | Those items of value that are owned by the business |
Non current liabilities | Long term debts owed by a business |
Liquidity | The ability of a business to pay back its short term debts |
Capital employed | The total value of capital used in the business. This is : shareholders' equity plus non-current liabilities |
Illiquid | This means that assets are not easily convertible into cash |
Profit | The total income of a business (sales revenue) minus total costs. |
ROCE (Return of Capital employed) | Earnings before interest and Tax / Capital employed |
Gross profit margin | Revenue - costs of goods sold / Revenue |
Net profit margin | Net profit / total revenue |
Acid Test | Current assets-Inventory / Current liabilities |
Current Ratio | Current assets / current liabilities |
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