Term
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Definition
| Working capital - the capital needed to pay for raw materials, day-to-day running costs and credit offered to customers. In accounting terms: making capital = current assets - current liabilities. |
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Definition
| the ability of a firm to be able to pay its short-term debts. |
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Term
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| when a firm ceases trading and its assets are sold for cash; turning assets into cash may be insisted on by courts of suppliers have not been paid. |
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Term
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Definition
| the period of time between spending cash on the production process and receiving cash payments from customers. |
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Term
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Definition
| the sum of cash payments to a business (inflows) less the sum of cash payments made by it (outflows). |
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Term
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Definition
| when a business cannot meet its short-term debts. |
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Term
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Definition
| payments in cash received by a business, such as those from customers (debtors) or from the bank, e.g. receiving a loan. |
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Term
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Definition
| payments in cash made by a business, such as those to suppliers and workers. |
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Term
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Definition
| customers who have bought products on credit and will pay cash at an agreed date in future. |
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Term
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Definition
| estimate of a firm’s future cash inflows and outflows. |
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Term
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Definition
| cash held by the business at the start of the month. |
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Term
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Definition
| cash held at the end of the month that becomes next month's opening balance |
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Term
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Definition
| tracking and monitoring of debtors' bills to ensure that bad debt is not increased. |
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Term
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Definition
| unpaid customers’ bills that are now very unlikely to ever be paid. |
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Term
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Definition
| expanding a business rapidly without obtaining all of the necessary finance so that a cash-flow shortage develops. |
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Term
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Definition
| an asset of item that is purchased with the hope that it will generate income or appreciate in the future. |
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Term
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Definition
| estimated difference between monthly cash inflows and outflows |
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