5231423
Description
Flashcards by Chuka Munkh-Achit, updated more than 1 year ago
|
Created by Chuka Munkh-Achit
about 8 years ago
|
|
| Question | Answer |
| Start-up capital | Capital needed by an entreprenuer to set up a business |
| Working capital | The capital needed to pay for raw materials, day-to-day running costs and credit offered to customers. In accounting terms working capital = current assets - current liabilities |
| Capital expenditure | Involves the purchase of assets that are expected to last for more than one year, such as building and machinery |
| Revenue expenditure | Spending on all costs and assets other than fixed assets and includes wages and salaries and materials bought for stock |
| Liquidity | The ability of a firm to be able to pay its short-term debts |
| Liquidation | When a firm ceases trading and its assets are sold for cash to pay suppliers and other creditors |
| Overdraft | Bank agrees to a business borrowing up to an agreed limit as and when required |
| Factoring | Selling of claims over debtors to a debt factor in exchange for immediate liquidity - only the proportion of the value of the debts will be received as cash |
| Leasing | Obtaining the use of equipment or vehicles and paying a rental or leasing charge over a fixed period. this avoids the need for the business to raise long-term capital to buy the asset. Ownership remains with the leasing company |
| Hire purchase | An asset is sold to a company that agrees to pay fixed repayments over an agreed time peroid - the assets belongs to the company |
| Long-term loans | Loans that do not have to be repaid for at least one year |
| Equity finance | Permanent finance raised by companies through the sale of shares |
| Long term bonds or Debentures | Bonds issued by companies to raise debt finance, often with a fixed rate of interest |
| Rights issue | Existing shareholders are given the right to buy additional shares at a discounted price |
| Venture capital | Risk capital invested in business start-ups or expanding small businesses that have good profit potential but do not find it easy to gain finance from other sources |
| Business plan | A detailed document giving evidence about a new or existing business, and that aims to convince external lenders and investors to extend finance to the business |
Want to create your own Flashcards for free with GoConqr? Learn more.