SOURCES OF FINANCE
CAPITAL EXPENDITURE <ul><li>This is used for buying fixed assets where large sums of money are involved but they are not p...
WORKING CAPITAL <ul><li>This day to day money required for the business. </li></ul>
SOURCES OF FINANCE <ul><li>THERE ARE TWO MAIN TYPES OF SOURCES OF FINANCE: </li></ul><ul><li>Internal sources </li></ul><u...
INTERNAL SOURCES <ul><li>Retained profit – profit made is reinvested into the business. </li></ul><ul><li>Controlling work...
EXTERNAL SOURCES <ul><li>Increasing credit trade – delaying payments on purchases for as long as possible.  </li></ul><ul>...
CONTINUED … <ul><li>Grants – an agreed amount of money given for special reason by government or other organisation.  </li...
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Sources of Finance

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Sources of Finance

  1. 1. SOURCES OF FINANCE
  2. 2. CAPITAL EXPENDITURE <ul><li>This is used for buying fixed assets where large sums of money are involved but they are not purchased often. </li></ul><ul><li>Example – New premises. </li></ul>
  3. 3. WORKING CAPITAL <ul><li>This day to day money required for the business. </li></ul>
  4. 4. SOURCES OF FINANCE <ul><li>THERE ARE TWO MAIN TYPES OF SOURCES OF FINANCE: </li></ul><ul><li>Internal sources </li></ul><ul><li>External sources </li></ul>
  5. 5. INTERNAL SOURCES <ul><li>Retained profit – profit made is reinvested into the business. </li></ul><ul><li>Controlling working capital – reducing costs, delaying outflows and speeding up inflows. </li></ul><ul><li>Sales of assets – assets the company owns can be sold and then leased back which frees up a large amount of capital in the short term. </li></ul>
  6. 6. EXTERNAL SOURCES <ul><li>Increasing credit trade – delaying payments on purchases for as long as possible. </li></ul><ul><li>Factoring – use a company to collect all debts. </li></ul><ul><li>Overdraft – an agreement with a bank to be allowed to overdraw a certain amount. </li></ul>
  7. 7. CONTINUED … <ul><li>Grants – an agreed amount of money given for special reason by government or other organisation. </li></ul><ul><li>Venture capital – people invest in the company when it is usable to float on the stock market. </li></ul><ul><li>Share issues – selling of new shares to raise capital. </li></ul>

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