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Retained profit
Profit kept in the business after tax and dividends have been paid.
Sales and leaseback
Selling an asset, such as a building, to a leasing company and paying an annual leasing charge so that the asset can still be used.
Profit and loss account
This shows whether the business made a profit or loss over the last period (usually a year). It is also known as the income statement.
Sales revenue
The value of goods sold. number of goods sold x price
Costs of sales
The cost to the business of the goods sold.
Gross profit
The difference between sales revenue and cost of making the products sold. Sales rev - cost of sales
Expenses of the business that are not directly part of the production process (e.g. rent and management salaries).
Net profit
The difference between sales revenue and total cost of the business Gross profit - overheads
Gross profit margin
The percentage of sales revenue that is gross profit. (Gross profit / sales revenue) x 100.
Net profit margin
The percentage of sales revenue that is net profit. (net profit / sales revenue) x 100.
Balance sheet
This lists the value of a company's assets and liabilities.
Items of value owned by a business.
Debts owed by a business.
How easy it is for a business to pay its short-term debts.
Bank loan
Finance provided by the bank that will be paid back over a set period.
Loans from friends and family
Finance provided by friends or family where the interest rate and repayment periods are agreed with them.
A flexible arrangement that allows a business to spend more money than it has in its bank account, as and when it needs to pay finance.
Long-term loan for purchasing a building.
Trade Credit
Suppliers who allow debts for goods and services to be paid one or two months after delivery.
Money given to a business by a government organisation or charity.
Shares issued
Value of shares bought by shareholders.
Part owners of a limited company - they own shares in it.