sources of finance - powerpoint presentation - full version

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1、SourcesofFinanceBTECBusinessLevel3-FinancialResourcesUnit2LearningObjectivesStudentswillbeabletoidentifydifferentsourcesoffinance.Studentswillbeabletolisten.Somestudentswillbeabletoapplytheinformationandproduceanindependentinformationpack.InternalSourcesofFi

2、nanceandGrowth‘Organicgrowth’–growthgeneratedthroughthedevelopmentandexpansionofthebusinessitself.Canbeachievedthrough:Generatingincreasingsales–increasingrevenuetoimpactonoverallprofitlevelsUseofretainedprofit–usedtoreinvestinthebusinessSaleofassets–canbead

3、oubleedgedsword–reducescapacity?Sellingmoregoodsandservicestoconsumersisonewaytogrowthebusiness.Title:HomeDepotquarterlyprofitrises53%.Copyright:GettyImages,availablefromEducationImageGalleryExternalSourcesofFinanceLongTerm–maybepaidbackaftermanyyearsornotat

4、all!ShortTerm–usedtocoverfluctuationsincashflow‘InorganicGrowth’–growthgeneratedbyacquisitionTheexistenceofcapitalmarketsenablefirmstoraiselongtermloansandsharecapital.Title:DowuponWallStreet.Copyright:GettyImages,availablefromEducationImageGalleryLongterm(M

5、eans?)Loans(Representcreditorstothecompany–notowners)Bankloansandmortgages–suitableforsmalltomediumsizedfirmswherepropertyorsomeotherassetactsassecurityfortheloanMerchantorInvestmentBanks–actonbehalfofclientstoorganiseandunderwriteraisingfinanceGovernment/EU

6、–mayofferloansincertaincircumstancesGrantsShares(ShareholdersarepartownersofacompanyonlyinPLC’s)NewShareIssues–arrangedbyinvestmentbanks.ShortTermBankloans–necessityofpayinginterestonthepayment,repaymentperiodsfrom1yearupwardsbutgenerallynolongerthan5or10yea

7、rsatmostOverdraftfacilities–therighttobeabletowithdrawfundsyoudonotcurrentlyhaveProvidesflexibilityforafirmInterestonlypaidontheamountoverdrawnOverdraftlimit–themaximumamountallowedtobedrawn-thefirmdoesnothavetouseallofthislimitTradecredit–Carefulmanagemento

8、ftradecreditcanhelpeasecashflow–usuallybetween28and90daystopayFactoring–thesaleofdebttoaspecialistfirmwhosecurespaymentandchargesacommissionfortheservice.Leasing–providestheopportunitytosecureth