Business Fianance Needs and Sources.

Question 1

Finance

Answer 1

is the money required in the business. Finance is needed to set up the business, expand it and increase working capital (the day-to-day running expenses).

Question 2

Start up Capital

Answer 2

initial capital used in the business to buy fixed and current assets before it can start trading.

Question 3

Working capital

Answer 3

finance needed by a business to pay its day-to-day running expenses

Question 4

Capital Expenditure

Answer 4

is the money spent on fixed assets (assets that will last for more than a year). Eg: vehicles, machinery, buildings etc. These are long-term capital needs.

Question 5

Revenue expenditure

Answer 5

similar to working capital, is the money spent on day-to-day expenses which does not involve the purchase of long-term assets. Eg: wages, rent. These are short-term capital needs.

Question 6

Retained profit

Answer 6

profit kept in the business after owners have been given their share of the profit. Firms can invest this profit back in the businesses.

Question 7

Sale of existing assets

Answer 7

assets that the business doesn’t need anymore, for example, unused buildings or spare equipment can be sold to raise finance

Question 8

Sale of inventories

Answer 8

s: sell of finished goods or unwanted components in inventory.

Question 9

Owners saving