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12 Cards in this Set
- Front
- Back
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What is retained profit? |
This is the profit kept by the business once costs and taxes have been paid. |
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What is selling unwanted assets ?
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This is selling unwanted assets e.g. machienry, vehicles, buildings ect. |
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What is new share issues ? |
companies can raise money by selling shares to addtional shareholders. |
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What is loan/mortgage ?
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borrwoing money from the bank.Long-term or short-term loans can be taken. |
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what is a advantage to retained profit? |
1. no intrest to be paid 2. no loss of control to shareholders |
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what is a advantage to selling unwanted assets?
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1. no intrest to be paid 2. no loss of control to shareholders |
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what is a advanatge of using new share issues for a source of finance? |
1. no intrest to be paid 2. share capital does not have to be re-paid |
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what is a advantage to loan / morgage? |
1. overdrafts are flexible 2. no loss of control 3. lower interest rates if taken over a longer period of time |
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disadvantages to retained profit |
1. profit may be too smal to finace growth 2. not very realiable |
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disadvantges to selling unwanted assets |
1. the assets is no longer owned this can affect productivity 2. leasing costs if the assets needs o be used in the future |
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disadvantages to new share issues |
1. dividends have to be paid 2. loss of control |
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disadvantages to loan / morgage |
1. intrest costs may be high 2. must be repaid 3. property will be used as security/ collateral |
