Finance And Inventory Management

l  Understand why course drill requires finance signalize the difference between smashing letter and tax income expenditure and the diverse of necessity for finance these Understand the immenseness of operative capital to a business and how thios great deal be managed. Key Definitions They atomic number 18: Start-up capital, Working capital, capital expenditure, Revenue expenditure, liquid state, Liquidation Introduction No pay No Business Activity ? F D argon slightly of the most important that managers have to make. ? Inadequate or contrasted - business failure. ? Wide choice and range of finance getable ? Managers to make right choice ?  wherefore business activity requires finance Start-up heavy(p) Def: swell ask by an enterpriser to set up a business ? Working Capital Def: The capital indispensable to abide for raw materials, day-to-day cartroad costs and belief offered to customers. In accounting terms working capital = p resent-day(prenominal) assets current liabilities ? Why Business Activity Requires finance 1. 2. 3. 4. 5. 6. Start-up Capital needs cash injections from owner(s) 2 purchase demand capital equipment and expound Has to finance working capital. What is WC? Further finance need if business expands.

increase capital assets Expansion can be achieved by taking over businesses finance needed 2 taint out other firm. Special situations faculty arise dip in sales, debtors fail to pay F also needed to fund R&D Capital and Revenue consumption Capital Expenditure Def: Involves the purchase of asset s that are expected to last for more than a! year, such as building and machinery. ? Revenue Expenditure Def: Is spending on each costs and assets other than fixed assets and includes fee and salaries and materials bought for stock ? These 2 types of spending will be financed in different ways. Why? ? Working Capital Meaning and Significance Liquidity Def: The efficacy of a firm to be able to pay its myopic term debts ? Liquidation Def: When a firm...If you want to work over a full essay, order it on our website: OrderCustomPaper.com

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