Sources Of Funds

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Capital Expenditure
Used for items which take a long time to gain money back, for example fixed assests take a long time to create any revenue to pay back for themselves
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Revenue Expendiditure
Used for everyday expenses for example - wages or raw materials, they provide a quick return
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Internal - Retained Profit
Share holders expect a share of profit Cheap and flexible
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Internal - Sale of assets
Selling fixed assets to save yourself from a financial crisis || but can lower the firms profability
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Internal - sale and lease back
Allows the firm to gain a cash payment - but they must pay the rent for leasing the asset
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Internal - Depreciation
When a machine is bought it will slowly decrease in value & and show as an expense in the next accounts
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External - Long Term -Share Capital
A limited company can raise money but starting off shares with customers/employers
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External - Long Term - Share capital: Preference Shares
Those who have a share of the firm gain a fixed percentege each year
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External - Long Term - Share Capital: Ordinary Shares
Shareholders gain their share after the preference share holders - there is no fixed percentege it is whats left over
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External - Long Term - Loan Capital
Who ever gives the laon are known as creditors - they charge interest and should be paid before the shareholders
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External - Long Term - Debetures
When a firm is given a loan and they have a fixed interest to pay back
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External - Long Term - Mortgages
Used to puchase property, and repayable upto 25 years
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External Sources Of Finance - Medium Term - Bank Loans
Provided for a specific agreed purpose
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External Sources Of Finance - Medium Term - Leasing
When a firm rents/leases a product rather than buying one
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External Sources Of Finance - Medium Term - Hire Purchase
Involves a regulkar payment for an asset, it does not become the individuals property unitl the final instalment is paid
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External Sources Of Finance - Short Term - Bank Overdraft
A bank anllows a firm to overspend a set amount for a set time
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Other cards in this set

Card 2

Front

Used for everyday expenses for example - wages or raw materials, they provide a quick return

Back

Revenue Expendiditure

Card 3

Front

Share holders expect a share of profit Cheap and flexible

Back

Preview of the back of card 3

Card 4

Front

Selling fixed assets to save yourself from a financial crisis || but can lower the firms profability

Back

Preview of the back of card 4

Card 5

Front

Allows the firm to gain a cash payment - but they must pay the rent for leasing the asset

Back

Preview of the back of card 5
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