2.1 - Raising Finance Flashcards
Grant
Money awarded to a business to help it grow.
Share Capital
The money a company raises by issuing common or preferred stock.
Common stock
Stock brought by shareholders:
- Voting rights
- Dividends fluctuate
- More volatile than Preferred stock
Preferred stock
Stock brought by shareholders:
- No voting rights
- Dividends are set
- Less volatility than common stock
Venture Capital
Form of equity financing where capital is invested in exchange for equity
Equity
Ownership
Floatation
Process of converting a private company into a public company by issuing shares available for the public to buy.
- Method of raising capital
Crowd Funding
Raising small amounts of capital from a large number of investors
De-Stock
Reducing the amount of stock held
Trade Credit
Arrangement of buying goods without making immediate payment
Overdraft
Line of credit on your business bank account (Short term cash flow)
Working Capital
Difference between current assets and current liabilities.
Debt factoring
When a business sells its accounts (Outstanding balances) to a third party for a discount.
Cash flow forecast
Predicts the cash inflows (receipts) and outflows (expenditures) for a business.
- Determines the cash funds a business has at one time
- Businesses can take measures to ensure enough finance is available
Net Cash flow
Difference between inflows and outflows over a trading period
