Anetka Lesson 8

bank overdraft

the amount of money that you owe to a bank when you have spent more money than is in your bank account

to pay interest

to pay money charged for the lend of funds

shareholder

an owner of shares in a company or business

taxes

money that you have to pay to the government so that it can pay for public services

stock

a supply of something for use or sale:

capital

a large amount of money that is invested or is used to start a business

to hedge

to protect your money against movements in the value of currencies, interest rates

working capital

the money, stocks of goods etc. that a company uses for its daily business activities

factoring

financial arrengement in which a company sells a debt that is owed to it at a reduced price to another company (=a factor) in order to receive cash immediately. The factor is then rosponsible for collecting the debt in full

invoice

a list of goods that have been sold, work that has been done, etc., showing what you must pay

outstanding invoice

an invoice that has not yet been paid

trade credit finance

An arrangement to buy goods or services on account, that is, without making immediate cash payment.

bank loans and term loans

borrowing money form a bank for an agreed medium or long term period and pays interests

property and machinery leasing

an agreement in which the bank buys machinery, cars etc. for the company and charges the company a regular fee to use this equipment - it saves form making long- term capital investments

factoring of sales invoices

if customer is not paying invoices, selling debts to a bank in exchange for immediate payment - bank charges commision fee for it

bonds/ debentures

a larger company can borrow money from the financial markets by issuing debt or 'paper' to the financial markets. It borrows money from long- term investors and agrees to repay with interest over given period

mortgages

a system of borrowing in which a loan is taken by offering the guarantee of some asset, usually a building, as a security

income statement

statement of revenue and expense, made of 1. trading performance, 2. operating performance, 3. distribution of profit

trading performance

the mechanism used to evaluate a trader's performance and risk tolerance

revenue/ turnover

the total sales last year

cost of sales

the money spent on raw materials and components for production

gross profit

the total sales minus the material costs

operating performance

cost of running a business

overheads/ expenses

​regular costs that you have when you are running a business or an organization, such as rent, electricity, wages, etc.

operating profit

the profit made after deducting all the costs of running the business

net interest paid

the money paid to the bank as interest on its loans

corporation tax

the money paid to the government as a tax on their profit

distribution of profit

the allocation of profits to different recipients such as shareholders and owners, or for different purposes such as research or investment

dividends

an amount of the profits that a company pays to people who own shares in the company

retained profit

the profit kept in the company to fund investment

earnings per share

the profit made for the year divided by the number of shares