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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 |