Sources Of Finance Flashcards
1
Q
Why businesses raise finance
A
- expenses
- to expand
- advertising
- materials
- pay debts
- help through slow trading periods
2
Q
Where do businesses get their finance from
A
- bank loan
- owners capital
- crowdfunding
- sale of assets
- shareholders
- overdraft
- retained profit
- trade credit
- partner
3
Q
Owners capital
A
- the amount the owner of a business has invested into the business
4
Q
Pro owners capital
A
- give owners complete control of business
- quick to get
- no interest
5
Q
Con owners capital
A
- might not have enough money
6
Q
What is owners capital used for
A
- increase company’s net worth
- expansion
- new products
7
Q
Retained profit
A
- the portion of a business earnings. That keeps after taking shareholders dividends into account
8
Q
Pro retained profit
A
- no interest
- quick access
- no debt accrued
9
Q
Con retained profit
A
- business may not have enough retained profit to meet needs
- not available to new business
10
Q
What is retained profit used for
A
- expansion
11
Q
Sale of assets
A
- a business sells its unused or spare assets e.g equipment
12
Q
Pro sale of assets
A
- money is made from unused equipment
- more space
-buy new
13
Q
Con of sales assets
A
- may not have enough assets to sell
- take a long time to sell
- might need assets for the future
14
Q
Examples - sale of assets
A
- selling old equipment to buy new
