Unit 6 · Revision notes
Finance — NCFE Business & Enterprise revision notes
Content area 6 covers sources of enterprise funding and business finance. You need to understand short-term funding such as trade credit, factoring, overdrafts and credit cards, and long-term funding from personal savings, bank loans, leasing, grants, business angels, crowdfunding, retained profits and share capital. It also covers financial terms and calculations, costs, liabilities and assets, the four financial documents — break-even chart, cash flow forecast, income statement and statement of financial position — plus ratio analysis and cash flow management.
Content area 6: Sources of enterprise funding and business finance
Funding Types
Short-term Funding Short-term funding refers to finance that is required for a period of up to 12 months. Short-term finance is usually used to finance…
~3 min readFinancial Terms and Calculations
Sales Revenue Sales Revenue is the total amount of money a company generates from selling its goods or services. Sales Revenue = Quantity Sold x Selling…
~3 min readCosts, Liabilities and Assets
Costs are the money a business spends. Liabilities are the money that a business owes (needs to pay out). Assets are what a business owns/ possesses. Costs…
~2 min readBreak-Even Chart
Break-even is when a company's total revenue equals its total costs, resulting in no profit or loss. Variable costs are the expenses paid out that change…
~3 min readCash Flow Forecast
Creating a cash flow forecast allows a business to plan for the future and identify any potential cash flow issues. A cash flow forecast attempts to predict…
~2 min readIncome Statement (Profit and Loss Account)
An income statement, also known as a Profit and Loss Account, is a financial statement that shows how a company earns its income and incurs its expenses over…
~3 min readStatement of Financial Position (Balance Sheet)
The Statement of Financial Position, or Balance Sheet, shows how much money has been invested in an enterprise and what it has been spent on. It is normally…
~3 min readRatio Analysis
Financial ratios offer a way to analyse a company's performance and financial health. Using past examples from NCFE, Plegg's Deli, we'll look at the 4…
~3 min readCash Flow Management
Cash flow within a business is comparable to water moving in and out of a bathtub. Picture the bathtub as the company's financial pool. The tap embodies the…
~3 min readThe rest of the course
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