Financing business activity Flashcards
1
Q
Start-up capital
A
Finance needed by a new business to pay for the essential fixed and current assets to begin production
2
Q
Capital expenditure
A
Money spent on fixed assets
3
Q
Revenue expenditure
A
Money spent on day-to-day expenses
4
Q
Internal finance
A
Money obtained from the business within itself
5
Q
Examples of internal finance
A
- Retained profit
- Sales of existing assets
- Running down stocks
- Owner’s savings
6
Q
Examples of external finance
A
- Issue of shares
- Bank loans
- Selling debentures
- Factoring debts
7
Q
Short-term finance examples
A
- Overdrafts
- Trade credit
- Factoring debts
8
Q
Medium-term finance
A
- Bank loans
- Hire purchase
- Leasing
9
Q
Long-term finance examples
A
- Issue of shares
- Long-term loans
- Debentures
