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Unit 3 Finance and Accounts 3.1 Source of Finance (EXTERNAL SOURCES OF…
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KEYWORD
- start-up capital = capital needed by an entrepreneur to set up a business
- working capital = capital needed to pay for raw materials, day-to-day running costs and credit offered to customers ( current assets - current liabilities)
- internal finance = from businesses own assets or from profit left
- external finance = from sources outside the business
- retained profit = profit left after deductions that usually used for growth and expansion
- liquidity = ability of a firm to pay its short-term debts(within 1 year)
- overdraft = bank agrees to a business borrowing up to an agreed limit as and when required
8.capital expenditure = purchase assets that durable than a year
- revenue expenditure = spending on all costs and assets other than fixed them.
- internal = money raised from the retained profits
- external = money raised from sources outside the business
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