Business finance involves managing a company's money through obtaining and utilizing funds. Primary sources include equity, debt, and retained earnings, with key differences between equity (no repayment) and debt (must be repaid with interest). Working capital is crucial for daily operations, while budgets and financial statements are essential tools for planning and assessing financial performance.

1. 1.What is business finance?
Business finance refers to managing a company’s money,
including obtaining, allocating, and using funds
effectively.
2.What are the primary sources of business finance?
The main sources are equity (owners’ investment), debt
(loans or bonds), and retained earnings (profits
reinvested in the business).

2. 1.What is the difference between equity and
debt financing?
oEquity financing: Raising funds by selling
shares; no repayment obligation.
oDebt financing: Borrowing money that must
be repaid with interest.

3. 1. What is working capital?
Working capital is the difference between a company’s current assets and
current liabilities, used to fund day-to-day operations.
2. What is the purpose of a budget in business finance?
A budget helps plan income and expenses, ensuring the business has enough
resources to meet its goals.
3. What is a financial statement?
A financial statement is a document that summarizes a company’s financial
performance, including the balance sheet, income statement, and cash flow
statement.