The Need For Business Finance:
Overview
Every business needs money before it can make money. From the first rent payment to the machinery that fills the factory, finance is the fuel that gets a business moving and keeps it running. Knowing exactly why and when a business needs finance is the first step to choosing the right source for it.
In this lesson you will learn the main reasons businesses need finance, from start-up capital to working capital, and the crucial difference between short-term and long-term finance needs. You will be able to match a particular need to the right kind of finance and explain why the match matters.
Objectives
- The main reasons why businesses need finance, e.g. start-up capital, capital for expansion and additional working capital
- Understand the difference between short-term and long-term finance needs
Lesson Note
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Lesson Evaluation
Congratulations on completing the lesson on The Need For Business Finance:. Now that youve explored the key concepts and ideas, its time to put your knowledge to the test. This section offers a variety of practice questions designed to reinforce your understanding and help you gauge your grasp of the material.
You will encounter a mix of question types, including multiple-choice questions, short answer questions, and essay questions. Each question is thoughtfully crafted to assess different aspects of your knowledge and critical thinking skills.
Use this evaluation section as an opportunity to reinforce your understanding of the topic and to identify any areas where you may need additional study. Don't be discouraged by any challenges you encounter; instead, view them as opportunities for growth and improvement.
- The finance needed to set up a new business is called: A. working capital B. start-up capital C. retained profit D. expansion capital Answer: B
- Money used for the day-to-day running of a business is: A. start-up capital B. working capital C. share capital D. fixed capital Answer: B
- Which is usually a short-term finance need? A. building a new factory B. buying machinery for ten years C. paying this month's wages D. opening a new branch Answer: C
- Buying premises that will last many years should be financed by: A. a bank overdraft B. trade credit C. long-term finance D. petty cash Answer: C
- A profitable firm cannot pay its bills this month. It most needs: A. more profit B. short-term finance for working capital C. a new product D. less expansion Answer: B
Available on the Green Bridge App
Download the Green Bridge CBT app on your phone or computer to access full lesson notes, practice questions, and more.
Available on the Green Bridge App
Download the Green Bridge CBT app on your phone or computer to access full lesson notes, practice questions, and more.
Recommended Books
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