Sources Of Funds 0.0 / 5 ? BusinessSources OF FundsASOCR Created by: Georgia LouCreated on: 22-04-14 11:49 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 1 of 16 Revenue Expendiditure Used for everyday expenses for example - wages or raw materials, they provide a quick return 2 of 16 Internal - Retained Profit Share holders expect a share of profit Cheap and flexible 3 of 16 Internal - Sale of assets Selling fixed assets to save yourself from a financial crisis || but can lower the firms profability 4 of 16 Internal - sale and lease back Allows the firm to gain a cash payment - but they must pay the rent for leasing the asset 5 of 16 Internal - Depreciation When a machine is bought it will slowly decrease in value & and show as an expense in the next accounts 6 of 16 External - Long Term -Share Capital A limited company can raise money but starting off shares with customers/employers 7 of 16 External - Long Term - Share capital: Preference Shares Those who have a share of the firm gain a fixed percentege each year 8 of 16 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 9 of 16 External - Long Term - Loan Capital Who ever gives the laon are known as creditors - they charge interest and should be paid before the shareholders 10 of 16 External - Long Term - Debetures When a firm is given a loan and they have a fixed interest to pay back 11 of 16 External - Long Term - Mortgages Used to puchase property, and repayable upto 25 years 12 of 16 External Sources Of Finance - Medium Term - Bank Loans Provided for a specific agreed purpose 13 of 16 External Sources Of Finance - Medium Term - Leasing When a firm rents/leases a product rather than buying one 14 of 16 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 15 of 16 External Sources Of Finance - Short Term - Bank Overdraft A bank anllows a firm to overspend a set amount for a set time 16 of 16
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