Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business A-level > 2.1 raising finance > Flashcards

2.1 raising finance Flashcards

1
Q

WhaT are fixed cosTs?

A

Costs that stay the same

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

whaT are variable cosTs?

A

CosTs ThaT chanGe

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Why does a business need finance ?
give 5 reasons.

A

-fundinG
-research+developmenT
-maRkETInG
-POSITIvE CAsHfLOW
-pay fIxEd + variable COsTs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

WHaT Is ThE dEfInITIOn Of InTERnal finance?

A

FINANCE GAINED FROM MONEY WITHIN A BUSINESS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

WHAT Is ExTERnaL fInanCE?

A

FinanCE GAINED FROM OUTSIDE OF A BUSINESS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Give examples of internal finance

A

-reTaIned pROfiTs
-sellinG asseTs
-OWNER FUNDS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

GIvE EXAMPLES OF ExTERnAL FINANCE (8/13)

A
  • government grant
  • leasing
    -crowd funding
    -peer 2 peer funding
    -family and friend funding
  • venture capital
    -share capital
    -overdraft
  • trade credit
    -business angel
    -loans
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

TRADE CREDIT DEFINITION

A

A SHORT FREE_TERM SOURCE OF FInanCE if the suppLIER Is WILlInG TO sUpply Goods noW and be paid laTer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

shaRE CapITal definition

A

IvESTmEnT GIvInG SHAREhOldERs pART-OWnERSHIp in The business in exchanGe for dividends

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

overdraft definiTon

A

sellinG a minimum level of a bank baLanCe bElOW zERO

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

VENTURE CApITAL DEFINTION

A

THE INVESTMENT OF AN ESTABLISHEd BUSINESS TOWARDS ANOTHER ESTABLISHED BUSINESS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

OWNERS CAPITAL DEFiNTION

A

THE PERSONAL FUNDS OF THE OWNER< WHICH MAY BE USED TO INVEST IN THE BUSINESS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

CASH FLOW DEFINITION

A

The movement of cash in and out of a businesses bank account

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Liability definition

A

A debt that needs to be paid

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Limited liability definition

A

When the owners are shielded from liability due to a failure of a business. The owners are safe.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is a business plan

A

A document created by a business or entrepreneur that provides details about each element of the business

17
Q

Retained assets definition

A

Profit Money accumulated by a business over many years

18
Q

Sale of assets definition

Example.

A

Identifying and disposing of assets that the business can do without

The business selling old machinery they no longer use

19
Q

Leasing definition

A

Obtaining the use of an asset such as a property or van without paying cash, like a long term rental

E.g leasing a house

20
Q

Government grant definition

A

A gift of finance from the government often used to help first time entrepreneurs

21
Q

Business angel definition

A

A wealthy individual making a personal investment into a business

22
Q

Loan definition (fixed)

A

The giving of a fixed amount of money for a fixed term with regular fixed repayments

23
Q

Crowd funding

A

The raising or money by a large group of people to finance a business, each person often only gives a small sum of money

24
Q

Family and friend funding defintion

A

The donation of money towards your business from a family member or friend

25
Q

Peer to peer funding definition

A

The practice of an individual lending to other individuals money with whom there is no relationship or contact

26
Q

Funding definition

A

The act of contributing money or resources towards a business

27
Q

family and friend funding (+/-)

A

+ repayment terms and conditions may be flexible
- amount of money giving may be limited

28
Q

Business angels (+/-)

A

+ may offer support and expertise
- high risk

29
Q

Peer 2 peer funding (+/-)

A

+ no relationship or contact is needed, all lending is done online
- the lender may not receive profit if the business fails

30
Q

Share capital(+/-)

A

+ no repayment required
- complex and costly process

31
Q

Trade credit (+/-)

A

+ improves cash flow
- high interest rates

32
Q

Grant (+/-)

A

+ no repayments required
- highly competitive

33
Q

Loan (+/-)

A

+ improves cash flow
- interest must be payed regardless of financial performance

34
Q

Venture capital (+/-)

A

+ attracts other sources of finance
- long and complex process

35
Q

Overdraft (+/-)

A

+ only pay for money borrowed
- the bank can call in the money at any time

36
Q

Leasing (+/-)

A

+ easy to arrange
- interest may very when late

Business A-level (20 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions