L08

Question 1

Define share issue.

Answer 1

A share issue is a long-term source of finance which is only avaliable to limited companies

Question 2

What is a mortgage?

Answer 2

A mortgage is a long-term source of funds when buying a building

Question 3

A business is conducting a SWOT analysis. Which oaur of categories contains factors which a business can control?

Answer 3

Strengths and weaknesses

Question 4

What are the 4 factors which effect the sucess/failure of a business

Answer 4

1)financial
2)non-financial
3)short-term
4)long-term

Question 5

What are financial factors?

Answer 5

factors used to measure the finance of a busienss

Question 6

Give 2 examples of posistive factors.

Answer 6

1)large market share

2)a reputation for quality

Question 7

What are negative factors?

Answer 7

1)making a loss

Question 8

What are past factors?

Answer 8

1) reputation built over previous years

2)state of the economy

Question 9

Name 2 present factors?

Answer 9

1) successful marketing campaign

2)good planning

Question 10

What are future factors?

Answer 10

1)outcome of impending legal action

Question 11

Define personal savings

Answer 11

The owners uses his or hers own savings to invest in a business

Question 12

define trade credit

Answer 12

A business buys its stock from suppliers immediately, but pays for it later. usually within 2 months

Question 13

define bank loan

Answer 13

A business borrows money from the bank. has to be paid back with interest

Question 14

define bank overdraft

Answer 14

The bank allows you to withdraw more money money than you actually have in your bank account

Question 15

define share issue

Answer 15

selling a piece of your business to raise capital

Question 16

define retained profits/reserves

Answer 16

a business past profit is reinvested

Question 17

define mortgage

Answer 17

a long term source of funds, could have a variable or fixed rate of interest

Question 18

define hire purchase

Answer 18

paying in monthly instalments which makes it easier to purchase

Question 19

define venture capitalist

Answer 19

a professional investor that thinks your business will do well, and therefore invest money into the business.

Question 20

define crowdfunding

Answer 20

finance raised from the public on the websites