Finance And Inventory Management

l  Understand why course drill requires pay signalize the difference between corking letter and revenue enhancement expenditure and the diverse of necessity for pay these Understand the greatness of on the job(p) capital to a business and how thios crapper be managed. Key Definitions They atomic number 18: Start-up capital, Working capital, capital expenditure, Revenue expenditure, liquid state, Liquidation Introduction No pay No Business Activity ? F D be slightly of the most important that managers have to make. ? Inadequate or contrasted - business failure. ? Wide choice and range of finance gettable ? Managers to make right choice ? why business activity requires finance Start-up nifty Def: heavy(p) ask by an entrepreneur to set up a business ? Working Capital Def: The capital indispensable to abide for raw materials, day-to-day caterpillar tread costs and belief offered to customers. In accounting terms working capital = present-day(prenominal) assets current liabilities ? Why Business Activity Requires finance 1. 2. 3. 4. 5. 6. Start-up Capital needs cash injections from owner(s) 2 purchase innate capital equipment and expound Has to finance working capital. What is WC? Further finance inf tout ensembleible if business expands.

increase capital assets Expansion can be achieved by taking everywhere businesses finance needed 2 taint out other firm. Special situations aptitude arise dip in sales, debtors fail to pay F also needed to fund R&D Capital and Revenue consumption Capital Expenditure Def: Invo lves the purchase of assets that ar expecte! d to last for more than a year, such as building and machinery. ? Revenue Expenditure Def: Is spending on all costs and assets other than fixed assets and includes fee and salaries and materials bought for stock ? These 2 types of spending will be financed in different ways. Why? ? Working Capital Meaning and Significance Liquidity Def: The susceptibility of a firm to be able to pay its get around term debts ? Liquidation Def: When a firm...If you want to work over a full essay, order it on our website: OrderCustomPaper.com

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