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Conor LC Bus U4 Pt2
Key terms LC Bus Unit4 Part2 Tax, Finance
Term | Definition |
---|---|
direct tax | any tax calculated on one's income |
indirect tax | any tax calculated on one's spending |
value added tax (VAT) | inderect tax on goods & services purchased: main rate reduced from 23% to 21% in Sep 2020 |
capital gains tax (CGT) | tax of 33% on any profit made from selling an asset |
capital acquisitions tax (CAT) | tax of 33% on gifts & inheritances above a certain level |
customs duty | tax on goods/services bought outside the EU |
excise duty | sin' tax on certain goods (alcohol tobacco petrol sugar) |
carbon tax | a tax on carbon fuels (increased from €26 to €33.50 per tonne in 2021). |
Pay Related Social Insurance (PRSI) | tax paid by both employers & employees to fund social services |
Pay As You Earn (PAYE) income tax | Irish progressive income tax deducted from wages/salary by employer |
self-assessment income tax | Irish income tax for self-employed workers (non-PAYE) |
Universal Social Charge (USC) | additional income tax introduced to help with government deficits |
Deposit Interest Retention Tax (DIRT) | tax on interest earned in savings accounts : 33% as of 2020 |
Local property tax (LPT) | homeowners tax based on the value of the property to fund local services |
corporation tax | tax on company profits (12.5% ) very low compared to EU partners |
commercial rates | a local commercial property tax which part funds local authorities |
progressive tax | tax in which the rate increases as the taxable amount increases |
regressive tax | flat rate tax that hits lower earners harder because they have less disposable income |
tax credits | credits awarded by Revenue to individuals/families that reduces the overall tax due. |
tax evasion | an illegal activity in which a person or firm deliberately avoids paying a true tax liability. |
tax avoidance | the legal use of the tax system to one's own advantage to reduce the amount of tax that is payable |
cash flow forecast | a projection of a firm's future financial position based on anticipated income and expenditure. |
deficit | when income is less than expenditure |
surplus | when income is more than expenditure |
bank overdraft | the extension of credit from a bank when an account reaches zero |
accrued expenses | an accounting term that refers to an expense that is recognized on the books before it has been paid |
factoring | a financial transaction in which a business sells its accounts receivable (i.e. |
trade credit | the loan extended by one company to another when goods/services are bought on credit. |
hire purchase | when one pays for a thing in regular instalments while having the use of it |
leasing | long-term rental |
mortgage | house loan |
retained earnings | the amount of income left over for the business after it has paid out dividends to its shareholders |
equity capital | funds paid into a business by investors in exchange for stock/shares. |
grants | government money to a business; doesn't need to be repaid. |
debenture | a company IOU (long-term) to investors that get a fixed rate of interest as a reward |
sale & leaseback | a company-owned asset that is sold to someone else and then leased back to the first owner for a long duration. |
venture capital | capital invested in a project where there is substantial risk |
collateral/security | something pledged as security for repayment of a loan |
current account | account used for day-to-day uses; doesn't pay interest on credit balance |
deposit account | savings account; pays interest on balance |
standing order (SO) | an instruction to a bank by an account holder to make regular fixed payments to a particular person/business. |
direct debit | an arrangement made with a bank that allows a third party to transfer money from a person's account on agreed dates |
profit & loss account | a financial statement that shows the financial performance of a firm over a given time period. |
gross profit | profit after deducting costs directly related to its production |
net profit | profit after all costs have been deducted; admin |
balance sheet | a 'snapshot' of the value of a company's assets and liabilities at a given date. |
fixed assets | long-term assets of a company |
current assets | aliabilities that will fall due in a year; includes bank overdraft- creditors. |
current liabilities | assets that will be used up in a year; includes inventory- cash- debtors |
creditors | firms that have supplies goods/services but have not been paid for yet. |
working capital | the difference between current assets and current liabilities. |
capital employed | total assets (fixed & current) - current liabilities |
ratio analysis | using financial data to measure key performance indicators of a company |
net profit margin | the ratio of net profit to revenue for a company typically expressed as a percentage |
gross profit margin | the ratio of gross profit to revenue for a company typically expressed as a percentage |
return on investment (ROI) | a ratio between net profit and cost of investment. Measures overall profitability for an investor. |
liquidity | the ease with which an asset can be converted into ready cash. |
current (working capital) ratio | a liquidity ratio that measures a company's ability to pay short-term obligations; CA/CL |
acid (quick) ratio | a company's capacity to pay its current liabilities without needing to sell its inventory; (CA-Inventory)/CL |
solvency | the ability of a company to meet its financial obligations. |
gearing | the extent to which a firm's operations are funded by lenders versus shareholders |
debt capital | bank loans |
debt/equity ratio | ratio that shows the level of gearing (the use of debt capital) to finance operations. |
liquidation | the process of bringing a business to an end by selling off its assets. |
recievership | a court-appointed tool that can help troubled companies to avoid bankruptcy. |