G12 BD Business Finance

asset

Anything of value that is owned

Dividends

Company's share profits to the shareholders based on the corporation's performance.

Working Capital

Day-to-day money that is available to a business. It is calculated as the difference between a firm's liquid assets (the value of cash, stocks and debtors) and its short-term debts (such as creditors, tax and overdrafts)

external sources of finance

Finance which is obtained from outside the business such as bank loans and cash from the issue of new shares

Internal sources of finance

Finance which is obtained within the business such as retained profit or the sale of assets

Non-current assets

Items owned by the business for more than one year

overdraft

Occurs when money is withdrawn from a bank account and the available balance goes below zero - can only be used as a short term fix due to its expensive nature

Share capital

The total value of capital raised from shareholders by the issue of shares

Current Liabilities

debts due within a short time, usually within a year

A rise in interest rates will cause

decline in investment spending, make loan and mortgage payments more expensive

A decrease in interest rates will

encourage businesses to borrow money

current assets

items that can or will be converted into cash within one year

Capital

money for investment

government grants

money that the government provides to entrepreneurs or organizations to perform tasks in the public's interest

crowdfuning

source of finance that entails collecting small amounts of money from the public