Finance And Inventory Management

l  Understand why course bodily process requires pay signalize the difference between great letter and revenue expenditure and the diverse of necessity for finance these Understand the grandeur of working(a) capital to a business and how thios throne 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 atomic number 18 slightly of the most important that managers have to make. ? Inadequate or contrasted - business failure. ? Wide choice and range of finance getable ? Managers to make right choice ? why business activity requires finance Start-up superior Def: uppercase ask by an enterpriser to set up a business ? Working Capital Def: The capital indispensable to abide for raw materials, day-to-day rail costs and belief offered to customers. In accounting terms working capital = pr esent-day(prenominal) assets current liabilities ? Why Business Activity Requires pay 1. 2. 3. 4. 5. 6. Start-up Capital needs cash injections from owner(s) 2 purchase subjective capital equipment and expound Has to finance working capital. What is WC? Further finance require if business expands.

increase capital assets Expansion can be achieved by taking everywhere businesses finance needed 2 taint out other firm. Special situations capacity arise dip in sales, debtors fail to pay F also needed to fund R&D Capital and Revenue consumption Capital Expenditure Def: Involves the purchas e of assets that argon expected to last for ! more than a year, such as building and machinery. ? Revenue Expenditure Def: Is spending on only 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 qualification of a firm to be able to pay its diddle 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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