management of finance Flashcards
1
Q
private sector
A
- owners equity -bank loan -grant -reinvested profits -mortgage
- leasing -hire purchase -bank overdraft -trade credit -issuing shares
2
Q
public sector
A
- taxation(corporation tax, income tax, vat)
- trading activities(eg admission fee to leisure centre)
3
Q
third sector
A
- donations
- grants
- membership fees/subscriptions
- trading activities(eg charity shop sales)
4
Q
how does a business generate cash?
A
- selling products/services
- receiving a bank loan/grant
- issuing shares
- selling a noncurrent asset it no longer needs(delivery van or property)
5
Q
what do businesses spend cash on?
A
- purchasing raw materials from supplier
- paying staff wages
- paying utility bills
- paying insurance
- paying rent/mortgage
- advertising costs
6
Q
cash flow problems
A
- demand falls for product/services
- increase in charges from utility supplier
- supplier increasing prices of raw materials
- bank charges due to late loan/overdraft payments
- investment in new technology required
- staff absence leading to extra staff cover being required
