Please enable JavaScript.
Coggle requires JavaScript to display documents.
Business Finance - Coggle Diagram
Business Finance
Needs and Resources
Types of Expenditure
Capital Expenditure (longer terms)
eg if school: Projectors
Revenue Expenditure (shorter terms)
eg: if school: pencils/notebook
What does the Finance department do?
Keep track of money & expenditures
Why do businesses need finance?
Additional working capital
Money needed to keep the business running( day-to-day)
eg: If it's a school, it would be pencils or desks if new students come (NOT exactly the electricity bill)
Capital to extend busines
Money needed to extend an existing business
Start up capital
to start the business itself
2 Types of Finance
Internal
Money from inside of the business
Uncle loan you money
Money from your piggy bank
Sale of existing Assets
You sell old unused things(within the business)
eg if KFC: oil fryer
DISCLAIMER: it's not fried chicken, fries etc.
Pros/Cons
Pro:
Retained profit
, Usually don't need interest(unlike Loans)
Con: New businesses usually don't have retained profit
External
Money from external sources
Bank Loans, etc.