What are the sources of finance?
- Bank loan
- Family and Friends
- Overdrafts - a business can spend more then they have, then they pay it back with high interest rates.
- Trade Credit - they pay for their stock 1-2 months after its delivered.
- Grants - is normally given by a government organisation or a charity.
1 of 5
Why does the govenment support entrepreneurs?
- business's pay tax
- boost the economy
- regenerate areas
- Try ro move out of recession
2 of 5
What are the equations for calculating Profit and
Profit = Sales revenue - Costs
Revenue = Price x Quantity Sold
3 of 5
What is shown in a Cash Flow Forecast?
- Receipts (cash in) - the money paid in
- Payments (cash out) - anything the business spends that month
- Net Cash Flow - the difference between receipts and payments
- Opening Balance - the money the business has at the start of the month
- Closing Balance - The money the company has at the end of the month
4 of 5
How can businesses try and prevent the cash shorta
- Trade Credit - make payments to your supplier at a later date
- Get customers to pay earlier
- Bank Loan - however there will be high interest attached.
5 of 5
Similar Business Studies resources: