Sources Of Finance Flashcards

1
Q

Retained profits

A

Profirs kept in the company after tax and dividends have been subtracted

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2
Q

Share capital

A

Money received from shareholders who own a company and vote whether to appoint directors at the AGM

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3
Q

Venture capitalists

A

Provides funds for small & medium sized firms who are considered too risky by the banks

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4
Q

Advantages/disadvantages of ahare capital or venture capital

A

Advantages
No repayments which helps cash flow
No security is done

Dividends
May lose control if u sell more than 50% of the business

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5
Q

Bank Loan definition

A

Fixed amounts that must be paid plus interest over agreed amounts of time

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6
Q

Advantages/disadvantages of bank loan

A

Advantages
Repayments online last for a fixed period of time
No control of business is lost

Disadvantages
Repayments must be made damages cash flow
Interest is an additional fixed costs reduces profits

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7
Q

Crowd funding definition

A

Inviting a large number of investors to provide a small loan or share capital

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8
Q

Overdraft definition

A

The bank account is allowed to have a negative balance
Interest paid on amount overdrawn

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