Jane Unit 3 > Learning Aim D > Flashcards

Learning Aim D Flashcards

(52 cards)

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1
Q

What are short-term finance and long-term finance?

A
  • Short-term is a short period.
  • Long-term is a long period.
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2
Q

What are internal sources?

A
  • These come from the business.
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3
Q

What is retained profit?

A
  • Profit kept in the business to fund future expenditure.
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4
Q

How do you work out retained profit?

A

revenue – total costs.

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5
Q

What is a pro of retained profit?

A
  • No interest.
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6
Q

What is a con of retained profit?

A
  • The amount available may be limited.
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7
Q

What are net current assets?

A
  • Shows money available in the business.
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8
Q

How do you work out net current assets?

A

Current assets - current liabilities.

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9
Q

What is a pro of net current assets?

A
  • Encourages management of cash flow to be effective.
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10
Q

What is a con of net current assets?

A
  • Lower stock can affect the firm’s ability to meet customer needs.
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11
Q

What is the sale of assets?

A
  • Selling assets.
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12
Q

What is a pro of the sale of assets?

A
  • No interest.
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13
Q

What is a con of the sale of assets?

A
  • Can be expensive in the long run.
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14
Q

What is the owner’s capital?

A
  • Money invested into the business straight from the owners’ pocket.
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15
Q

What is a pro of owner’s capital?

A
  • No interest.
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16
Q

What is a con of owner’s capital?

A
  • The amount available may be limited.
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17
Q

What are loans?

A
  • Borrowed for a specific purpose and time.
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18
Q

What is a pro of loans?

A
  • Ownership/control is not lost.
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19
Q

What is a con of loans?

A
  • Interest is charged.
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20
Q

What is crowdfunding?

A
  • Attracting lots of investors for a project.
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21
Q

What is a pro of crowdfunding?

22
Q

What is a con of crowdfunding?

Study These Flashcards
A
  • Loss of ownership.
23
Q

What is a Mortgage?

Study These Flashcards
A
  • Loans that last 25 years to buy a house.
24
Q

What is a pro of a mortgage?

Study These Flashcards
A
  • spreads the cost.
25
What is a con of a mortgage?
- Penantiles may occur.
26
What is venture capital?
- **Investment** from an **experienced entrepreneur** in return for a **stake** in the business.
27
What is a pro of venture capital?
- Provided by professionals.
28
What is a con of venture capital?
- Loss of ownership.
29
What is debt factoring?
- **Selling** off **business debt** to a **third party** in return **for cash.**
30
What is a pro of debt factoring?
- Speeds up cash flow.
31
What is a con of debt factoring?
- gives a wrong impression of the customer.
32
What are hire purchases?
- **Hiring** assets.
33
What is a pro of hire purchases?
- Spreads the cost.
34
What is a con of hire purchase?
- Interest rates are higher than the product.
35
What is leasing?
- The **payment for** the asset.
36
What is a pro of leasing?
- Spreads the cost.
37
What is a con of leasing?
- Interest rates are higher than the product.
38
What is Trade credit?
- Pay the **supplier at a later date** in order to **sell products to customers.**
39
What is a pro of Trade credit?
- No Loss of ownership.
40
What is a con of Trade credit?
- Short-term.
41
What is grants?
- Money provided **from the government** to be used for a **specific purpose.**
42
What is a Pro of grants?
- No loss of ownership.
43
What is a con of grants?
- Requires an application process.
44
What is Donations?
- Money **given to a charity.**
45
What is a pro of donations?
- No Loss of ownership.
46
What is a con of donations?
- A small amount.
47
What is peer-to-peer lending?
- 1 businessperson lending money to another businessperson.
48
What is a pro of peer-to-peer lending?
– Low interest.
49
What is a con of peer-to-peer lending?
- A small amount.
50
What is Invoice discouting?
- A **reduction offered to customers **to make **products/services cheaper.**
51
What is a Pro of invoice discounting?
- No loss of ownership.
52
What is a con of invoice discounting?
- Can affect cash flow.
Jane Unit 3
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