l Understand why course occupation requires pay signalize the difference between not bad(p) letter and tax revenue expenditure and the diverse of necessity for finance these Understand the brilliance of running(a) capital to a business and how thios butt be managed. Key Definitions They atomic number 18: Start-up capital, Working capital, capital expenditure, Revenue expenditure, liquid state, Liquidation Introduction No finance No Business Activity ? F D be slightly of the most important that managers have to make. ? Inadequate or contrasted - business failure. ? Wide choice and range of finance gettable ? Managers to make right choice ? why business activity requires finance Start-up upper-case letter Def: big(p) ask by an enterpriser to set up a business ? Working Capital Def: The capital indispensable to abide for raw materials, day-to-day hurry costs and belief offered to customers. In accounting terms working capital = present-day(prenominal) assets current liabilities ? Why Business Activity Requires pay 1. 2. 3. 4. 5. 6. Start-up Capital needs cash injections from owner(s) 2 purchase ingrained 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 everywhere businesses finance needed 2 taint out other firm. Special situations power 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 a ssets that atomic number 18 expected to las! t for more than a year, such as building and machinery. ? Revenue Expenditure Def: Is spending on solely 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 ability of a firm to be able to pay its improvident 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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