THEORY AS PRACTISE - BUSINESS LECTURE
Finances
Finances are all abut the control and flow of money.
Money – is a medium for smoothing trade in all things. A measurement method of value, however it is argued that money has no intrinsic value.
Money Has Different Definitions
- The cash you have
- The cash you have and the cash you can get (e.g. from savings)
- The cash you have and the cash you can get plus loan credit
- Loan credit either short term or long term
The cost of an item is not always the same price you will pay for that item in store, this is how profit margin is gained. Profit is the positive difference between cost and price, whereas loss is the negative between the both. Income is known as money coming in, as apposed to expenditure which is money going out. Debt is how much money you owe.
Direct Cost - Direct cost is directly attributed tit the overall cost of the item.
Indirect Cost - Cost of any overhead e.g. hardware.
Variable Cost - A cost that varies with output.
Fixed Cost - A cost that doesn’t vary with output.
