Unit 3.3 EFFECTIVE FINANCIAL MANAGEMENT Flashcards Preview

Edexcel Business by Channelle > Unit 3.3 EFFECTIVE FINANCIAL MANAGEMENT > Flashcards

Flashcards in Unit 3.3 EFFECTIVE FINANCIAL MANAGEMENT Deck (4)
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1

Name an internal source of finance.

Selling assets

2

Give one advantage of using retained profit as a way of financing business growth?

CHEAPER
No interest has to be paid
EASIER
No LOANS have to be applied for
BUsiness
NOT in DEBT

3

3 marks.. outline one method that a business may use to increase its profit..

Reduce the number of STAFF
which will lower its COSTS
If revenue stays the same, profit should rise

(other examples, adding value, price change, improve customer service)

4

3 marks ..Explain one disadvantage to the business of BORROWING money from a BANK

PAY INTEREST
EFFECT depends upon how MUCH MONEY IS BORROWED and how HIGH/LOW INTEREST RATES are
if A LOT OF MONEY IS BORROWED and HIGH interest rate.. more pay back=more costs
LESS PROFIT