Money and finance - Bài tập trắc nghiệm
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Business Money & Finance
In business, it is crucial to understand the money coming in and the money going out. The total amount of money a company receives from selling its goods or services is called its turnover. A broader term for money received, including taxes or other income sources, is revenue.
Conversely, the money a business spends on its operations is referred to as its expenditure or expenses. To determine success, businesses look at their profits.
- Gross profit: The profit calculated before taxes and other costs are deducted.
- Net profit: The final amount of profit remaining after all taxes and expenses have been paid.
- Profit margin: The percentage difference between the cost to produce a product and its selling price.
Businesses often face challenges. Even if a business is making a profit, it might struggle with its overheads. If more money is going out than coming in on a daily basis, the business has a cash flow problem.
- 📉 Debt: When a company owes money, it is in debt.
- ❌ Write off: If a customer cannot pay, the company may have to write off the debt (accepting it is lost).
- 🏛️ Bankrupt: If debts become overwhelming, a company may go bankrupt or be declared bankrupt by a court, meaning it must close down.
To start or expand, a business needs capital. For new and potentially risky ideas, founders might seek venture capital from specialized investors (also called backers).
There are several ways a business can secure funding:
- Selling shares: Investors buy a portion of the company. If successful, they are paid a dividend.
- Getting a loan from a bank.
- Using an overdraft facility for short-term cash flow needs.
- Receiving a sudden injection of capital to boost operations or save the company from financial trouble.