Finance Flashcards
whats the role of finance department
ensure funds are available for business the achieve their objectives
ensure costs are monitored and controlled
generate finance information to allow decision making
where a business gets their finance depends on:
sector they operate in
why finance is needed
size of business
what are internal sources of finance
owner investment
retained profit
sale of asset
what are external sources of finance
bank overdraft trade credit bank loan mortgage family and friends loan
advantages of owner investment
no paying back
full control of business maintained
disadvantages of owner investment
personal savings may be lost if business in unsuccessful
advantages of retained profit
doesn’t need paid back
disadvantages of retained profit
take to long for profits to build up
advantages of selling an asset
do not need to pay back
money can be raised quickly
