Business (learning outcomes D) Flashcards
what are the two types of sources of finance?
Long term and Short term
what are internal sources of finance?
- retained profit
- net current assets
- sale of assets
what are retained profits?
when a business makes a profit and they re invest it into the business
what are net current assets?
current assets minus current liabilities
what are sale of assets?
businesses sell assets in order to receive a cash injection
what are external sources of finance?
money you get from outside a business
name a few examples of external sources of finance?
- overdraft
- mortgages
- loans
-crowd funding
what is owners capital?
money that is from the owners finances
what is a loan?
money that is lent but is paid back with interest
what is crowd funding?
people investing small amounts of money into businesses
what is a mortgage?
a long term source of finance (paid within 30 years)
what is venture capital?
money invested by a group or individual or group, they take the risk with helping a new business
what is debt factoring?
invoiced being sold for a discounted price
what is hire purchases?
used to purchase an asset
what is leasing?
a way of renting an asset a business needs
