Sources of finance

KatnissGranger
Mind Map by KatnissGranger, updated more than 1 year ago
KatnissGranger
Created by KatnissGranger almost 5 years ago
2
0

Description

Business studies hw- KM 11K
Tags

Resource summary

Sources of finance
1 Internal
1.1 Retained profit
1.1.1 Does not have to be repaid
1.1.2 No interest to pay
1.1.3 New business won't have retained profits
1.1.4 Small firm profits may be too low
1.1.5 Keeping more profits in the business reduces payments to owners
2 Sale of existing assets
2.1 Makes better use of the capital tied up in the business
2.2 Does not increase the debts of the business
2.3 Takes time, amount raised is never certain until asset is sold
2.4 Not available for new businesses
3 Sale of inventories to reduce inventory levels
3.1 Reduces opportunity cost
3.2 Must be done carefully to avoid dissapointing cutomers, if not enough goods are kept as inventory
4 Owners' savings
4.1 Should be available to firm quickly
4.1.1 No interest is paid
4.2 Savings may be too low
4.3
Show full summary Hide full summary

Similar

Profit and Loss Accounts
Stuart Smith
AS - Buss1 - Formula Cards
Sophie Davis
BUSS1
Sophie Davis
Finance- Break even
cesleviciutek
The skills needed to be a successful entrepreneur
Rosie Wallis
Finance - Balance sheets
cesleviciutek
Finance sources of Finance
cesleviciutek
How to Turn Business Failure into Business Success
Micheal Heffernan
Share-based payments
meyer cohn
Impairment of assets
meyer cohn
Revenue from contracts with customers
meyer cohn