Business Studies Revision - Finances

HideShow resource information


The money is used for helping get started to build a business:

  • Equipment 
  • Staff
  • Expand Business 
  • Advertising
  • Allowing to invest

Finances for large businesses:

Expanding a business requires funds which can be used for a number of purchases or expenses including :

  • New machinery
  • Additonal stock
  • Resaearch and Development 

The main methods used are :

  • Retained profit 
  • New share issue
  • Loan or mortgage
  • Selling unwanted assests 

Retained Profit :

A internal source of finance that uses profit from previous years to reinvest in to the business.

New Share Issue:

A company with previously unissued shares can choose to issue these to raise cash in  return for share capital.

Loan or Mortgage:

Borrowing money from a bank or other financial institution. Loans can be short or long term whereas mortgages are long term and are secured agaisnt premises.

Selling Unwanted Assets:

A business will own items of value if these are no longer of use to the business they could be sold to raise funds.

Sales Revenue: Income that a business recieves from its sales (selling price x quantity)                                                          


No comments have yet been made

Similar Business Studies resources:

See all Business Studies resources »See all Finance resources »