Funding and Finance Flashcards
6 cards from real Entrepreneurship practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Funding and Finance flashcards as text
What is break-even analysis?
Answer: The calculation of when total revenues equal total costs, resulting in neither profit nor loss
Break-even analysis determines the sales volume at which total revenues exactly cover total costs, marking the point where a business becomes profitable.
What is gross profit margin?
Answer: Revenue minus cost of goods sold, expressed as a percentage of revenue
Gross profit margin measures the percentage of revenue remaining after subtracting the direct costs of producing goods or services.
What is cash flow in entrepreneurship?
Answer: The movement of money in and out of a business over a period of time
Cash flow tracks the inflows and outflows of cash in a business, and positive cash flow means more money is coming in than going out.
What is accounts receivable?
Answer: Money owed to a business by its customers for goods or services already delivered
Accounts receivable represents outstanding invoices—money customers owe a business for products or services they have already received.
What is the purpose of a profit and loss (P&L) statement?
Answer: To summarize revenues, costs, and expenses to show net profit or loss over a period
A profit and loss statement (also called an income statement) summarizes revenues and expenses to show whether a business was profitable over a specific period.
What is the purpose of an operating budget?
Answer: To plan and control expected revenues and expenses for day-to-day business operations
An operating budget projects expected income and expenses for a set period, helping entrepreneurs manage resources and measure financial performance.