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Business Studies-Theme 2 (2.1.4 (Business plan and Cash flow forecast)…
Business Studies-Theme 2
2.1.1(Internal Finance)
Finance-Finance is the investment needed to run,open or expand a business
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2.1.2 (External Finance)
Loan-A thing that is borrowed,especially a sum of money that usually has to be paid back with interest
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External Finance-Finance that is obtained from investors,banks and people outside the business
2.1.3(Liability)
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Finance Suitable for Unlimited Liability-Business Loans,Overdraft,Trade Credit
Unlimited Liability-Means that the business owner is completely liable for the business.If a business had debts then the business owner must pay it
Finance Suitable for Limited Liability-Retained profit from business,government grants,Sale of assets
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2.1.4 (Planning)
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A business plan:
-to persuade lenders that the business will make enough
profit and pay it back
-it will attract investors
-gives direction
-sets smart targets
-identify potential problems early on
-must include a detailed cash flow statement
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