FINANCE IN

BUSINESS
NICOLAS ALVAREZ CORAL 11A
 FINANCE

Finance is a very important branch to be able to manage a business since this activity consists of the
exchange of capital or goods that favor both sides in order to progress your company or entity.
For example the company A needs the cloth that the company B use, company A need the cloth to
produce a new type of clothes of their new branch, so company A made a deal with company B to deliver
cloth in factory of company A, and company A will pay an specific amount of money for a period of time
as the contract says.
WHY IS IMPORTANT THE FINANCE?

• This technique is important because is a method in which companys and people benefit
from each other making alliances .
• Also this is an opportunitie to know more cultures and exapand the knowledge of the
people.
 PROFIT

• Profit are the total earnings that a business has taking into account that they have already
payed all the debts, salaries, rent, machinary, raw material, etc. In other Words are the
free earnings that the Company won by working in a certain period ot time.
• The profit is immportant because is a lifeguard that could help you to pay
Things you not have expected in your Company such as debts.

Also the companies use that profit to spend the money in future programs
Of the business ass buying new machinary or raw material.
 REVENUE

• Revenue are the total earnings that a business have without taking into account that they have to pay all
their expenses as a business.( total cost).

For example a kid starts his own business of candys, this kid in only one day sell all his merch so he has to
invest money that he earned to buy more products so he is not going to lose money at the other day of
working.
 TOTAL COST

• Is all the things that the business need to pay to keep producing their outputs such as rent of the office,
salaries, raw material, advertisements, production,etc.
• Generally most of the incomes of the business goes to the invesment of the new products but also the
expenses could be lower tan the incomes.
PROCESS OF EARNING MONEY
PROCESS

• 1. First yo buy raw material

• 2. then you produce the raw material and make an output
• 3.then you sell the output
• 4. you earn money with your sellings
• 5. you have a revenue so that mean that you have to pay salaries and other things that
Company needs to keep working
• 6. then you have a profit which you can safe for a future
 CASH FLOW FORECAST

• A cash flow forecast is a plan that shows how much money a business expects to receive in, and pay
out, over a given period of time.
• A Company expect $15.000 but also they expect to use $13.000
So Company only will win $2.000
Positive Negative
High earnings Low earnings

Low expenses High expenses

 INCOME STATESMENTS

• This is a financial process that a Company must carry out every year. This process consist of reviewing the income
of the Company over a period of time. This document helps to have control of all the money and to know where it
is and where it is operating. In addition, these data serve investors to see if it is feasible to invest in a Company
since this file shows all the finances of the Company.