Business - 4BS1 PearsonEdexcel

Business Finance - Sources

Gbogbo ọrọ náà

Every business needs money, whether it is a sole trader launching a food stall or a multinational building a new factory. Where that money comes from, how much it costs, and how quickly it must be repaid shape the decisions a business can make and the risks it takes on.

In this lesson you will explore why businesses need finance at different stages, distinguish internal sources such as retained profit from external sources such as bank loans and share capital, and learn how to recommend the right source for a given situation. These skills appear in almost every Paper 1 case study, so mastering them early gives you a real advantage.

Ebumnobi

  1. Understand the need for finance: short-term needs, long-term needs, to start up or expand
  2. Understand internal sources of finance: personal savings, retained profit, selling assets
  3. Understand external sources of finance: overdraft and trade payables, loan capital, share capital including stock market flotation (public limited companies), venture capital, crowdfunding

Maapụ uche

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Kaadị ncheta

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Akwụkwọ Ọmụmụ

A new cafe needs equipment, ingredients and three months of rent before the first customer walks through the door. A clothing retailer wants to open in a second city. A tech start-up is burning through cash while it develops an app that has not earned a penny yet. Each of these businesses needs finance, but the amount, the timing and the best source are completely different. Choosing the wrong source can be as damaging as running out of money altogether.

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Nnyocha Ọmụmụ

Ekele diri gi maka imecha ihe karịrị na Business Finance - Sources. Ugbu a na ị na-enyochakwa isi echiche na echiche ndị dị mkpa, ọ bụ oge iji nwalee ihe ị ma. Ngwa a na-enye ụdị ajụjụ ọmụmụ dị iche iche emebere iji kwado nghọta gị wee nyere gị aka ịmata otú ị ghọtara ihe ndị a kụziri.

Ị ga-ahụ ngwakọta nke ụdị ajụjụ dị iche iche, gụnyere ajụjụ chọrọ ịhọrọ otu n’ime ọtụtụ azịza, ajụjụ chọrọ mkpirisi azịza, na ajụjụ ede ede. A na-arụpụta ajụjụ ọ bụla nke ọma iji nwalee akụkụ dị iche iche nke ihe ọmụma gị na nkà nke ịtụgharị uche.

Jiri akụkụ a nke nyocha ka ohere iji kụziere ihe ị matara banyere isiokwu ahụ ma chọpụta ebe ọ bụla ị nwere ike ịchọ ọmụmụ ihe ọzọ. Ekwela ka nsogbu ọ bụla ị na-eche ihu mee ka ị daa mba; kama, lee ha anya dị ka ohere maka ịzụlite onwe gị na imeziwanye.

  1. Which of the following is an internal source of finance? A) Bank loan B) Retained profit C) Venture capital D) Crowdfunding Answer: B
  2. A bank overdraft is most suitable for: A) Buying a new factory B) Covering a short-term cash-flow gap C) Starting a new business D) Paying shareholders dividends Answer: B
  3. Which source of finance involves selling part-ownership of a company? A) Bank loan B) Trade credit C) Share capital D) Hire purchase Answer: C
  4. What is a disadvantage of using venture capital? A) It must be repaid within 30 days B) The entrepreneur gives up some control C) It can only be used by sole traders D) It carries the highest interest rate Answer: B
  5. Which type of business can raise finance through a stock market flotation? A) Sole trader B) Partnership C) Private limited company D) Public limited company Answer: D

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