Business - Finance

1. Variable Costs = number of units x price per unit
2. Fixed costs remain the same
3. Total Costs = Variable + Fixed
4. Revenue = selling price x Quantity Sold

1. The difference between the break-even output and the expected output

1. They provide a cash advance of around 80%

1. Can have fixed or variable interest rates and are usually taken out on a long term

1. Have fixed interest rates

1. EXAMPLE: Bringing employment to an area with high unemployment

1. All share holders are entitled to the dividend

1. The costs which are directly used in the making of the items
2. Examples
   1. Machinery
   2. Management Costs
   3. Office Rent

1. The costs that get the item to the customer
2. Examples
   1. Raw Materials
   2. Telephone Costs
   3. Factory Labour

1. This allows the company to find out how much it will cost them to make one more product

1. This is how much it will cost to make each product

1. These are costs that do not change dependant on the output of products
   1. Usually states as paid per month or annum
2. Examples
   1. Rent
   2. Management Costs

1. These costs are dependant on the output of products
   1. Usually stated as a price that is paid per object used
2. Examples
   1. Employee Wages
   2. Materials

1. These costs are the fixed and variable costs added together

1. It is important that a business knows if they will have too much or too little money

1. Raising Sale Price
2. Reducing The Sales Price
3. Increasing the Amount Sold

1. Retained Profits
   1. Most companies only allocate part of their profits to their share holder so can use the profits that were not shared as a source of finance
2. Collecting owed finances from customer etc.

Attachments:

• External Sources of Finance

1. Owner's Capital
2. Venture Capital
3. Borrowing
   1. Bank Loans
   2. Debentures
   3. Bank Overdrafts
   4. Hire Purchase
   5. Leasing
   6. Morgages
   7. Morgages
   8. Supliers
   9. Factoring
   10. Government Loans