Brainscape's Knowledge GenomeTM

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


See full index

A-Level Business > Business Finance > Flashcards

Business Finance Flashcards

1
Q

Types of sources of finance

A

Internal
External

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

Internal sources of finance

A

Retained profit
Working capital
Sale of assets

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

Working capital

A

Reduce trade credit period
Reduce stock holdings

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

Sale of assets

A

Established businesses can sell off assets that are no longer required.

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

External sources of finance

A

Loans
Leasing
Overdrafts
Trade credit
Share capital
​Hire purchase
Debt factoring
Venture capitalists

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

Loans

A

Borrowing a fixed amount for a period of time.

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

Disadvantage of loans

A

Assets can be taken away if the owner isn’t able to maintain payments.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Leasing

A

Gaining the use of a productive asset by paying monthly fees.

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

Disadvantages of leasing

A

You don’t own the asset
Costs more than the outright purchase

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

Overdrafts

A

The facility to withdraw more from a bank account than is in the account.

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

Disadvantage of overdrafts

A

Overdrafts can be withdrawn by a bank with just 30 days’ notice

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

Trade credit

A

Businesses buy items and pay for them at a later date.

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

Disadvantages of trade credit

A

Delaying payment may result in higher prices
Using trade credit tends to get a business a bad reputation

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

Share capital

A

Becoming a limited company to sell shares and gain capital.

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

Disadvantage of share capital

A

Potential loss of control

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

Hire purchase

A

Regular instalments over a period of time for a purchase.

17
Q

Disadvantage of hire purchase

A

Costs more than an outright purchase

18
Q

Debt factoring

A

Financial organisations pay a large proportion of an invoice for the business.

19
Q

Disadvantage of debt factoring

A

Only offered to businesses with a good trading record and reliable customers

20
Q

Venture capitalists

A

Professional investors that invest large amounts of capital into SMEs.

A-Level Business (31 decks)

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