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Ch 9 Finance
Ch 9
Term | Definition |
---|---|
CASH FLOW STATEMENT | plan future inflows and outflows of cash |
DURATION OF SHORT TERM FINANCE | 0-1 yrs |
DURATION OF MEDIUM TERM FINANCE | 1-5 yrs |
DURATION OF LONG TERM FINANCE | 5+ yrs |
SHORT TERM FINANCE OPTIONS | credit card trade credit factoring bank overdraft |
MEDIUM TERM FINANCE OPTIONS | term loan hire purchase leasing |
LONG TERM FINANCE OPTIONS | debenture capital grants venture sale and leaseback |
"LEANING ON TRADE" | when a business doesn't pay their suppliers on time and they stop supplying |
MORTGAGE | long term loan to buy house |
VENTURE CAPITAL | banks offer both loan and capital, long term finance |
SALE AND LEASEBACK | long term finance |
COLLATERAL/SECURITY | what you offer in return for loan eg. land, house, shares |
EQUITY CAPITAL | ordinary share capital (owner) (long term finance for business) - dividend |
DIVIDEND | payment for your investment |
FACTORING | short term (0-1 yrs) selling your debtors |
LEASING | renting not owning eg. photocopier |
APR | annual percentage rate, a rate charged by loaners on the money loaned |
USES OF SHORT TERM FINANCE | wages |
USES OF MEDIUM TERM FINANCE | machinery |
USES OF LONG TERM FINANCE | buildings |