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6. What is a disadvantage of selling assets?
- Second hand and scrap value is low
- No one wants second hand stuff
- Ebay wont sell buildings
7. What is retained profit?
- Profit that has been saved in a savings account
- Profits the owners have decided to invest back into the business
- Profits from another company
8. What is a disadvantage of retained profit?
- Leaves the company cash flow poor
- Inexpensive
- Takes a lot of time to save up
9. Trade cred is taking longer to pay your BLANK which is used to raise finance. What should be in the space of BLANK?
10. How does factoring work?
- Selling off debts to another company
- Chasing debtors
- Chasing your boss around the office
11. How is re investing savings different from re investing profit?
- Ones older than the other
- Not majorly, it is retained profit from previous years or bank savings from stocks and shares
- Very different but I don't know how
12. What is an disadvantage of an overdraft?
- Too much cash is bad for a business
- High interest rates and difficult to plan ahead
- Take more money than you actually have
13. What is cash flow?
- Movement of cash each month in and out of the business
- Profit and loss
- Cash put into the business
14. Give a reason for cash flow problems
- Poor economic conditions
- Too little stock
- Demotivated workers
15. Reducing stock improves liquidity by running down stock levels, taking up less space in stock rooms and warehouses and therefore reducing costs
16. What are two ways in which a business can improve their cash flow?
- Selling off stock at sale prices and reducing credit periods
- Never offering reduced prices
- Using personal savings
17. What is a advantage of re investing savings?
- A reliable method of looking after surplus
- Turn savings into profit
- Business will look after it better than the business
18. How do preference shares differ to ordinary shares?
- Not cumulative
- Do not usually allow you to have voting rights but it is paid at a fixed rate
- They are weird
19. Short term finance is up to 3 years, long term finance is up to 10 years, how long is classed as medium term finance??
- 3 to 10 years
- 7 years
- 5 years
20. What is an advantage of trade credit?
- Fast money
- Not real money
- Creates problems