Business Finance
short term and long term for finance
·
Short term finance
·
long-term finance
Cash profit
I
Administration, bankruptcy and liquidation
Fail due to lack of finance:Administration
Appointedto keep the business operational and
find a
buyer. If this
proves impossible:Bankruptcy
legal process begins:liquidation ofthe assets
Managing working capital
Current assets:Cash,
inventory, trade recievable
Fashl
--
All
product Materials
Ion credit]
60days Ion credit]
30
T/R 50 days
90
A T/P
↳ Nation
-> Receiving quicker
-> Paying later
=>
4WC
Managing working capital -
Inventory can be managed by:
keeping smaller inventory levels
·
·
Use JIT
Trade payables (Pay later)
Delaying payments to supplier to increase
·
the credit period
Only buying goods/parts from suppliers
·
who will offer credit
Trade receivables (Receive payment quicker (
·
Only selling products for cash andnot on credit
·
Reducing the creditperiodoffered to customers
Capital expenditure us Revenue expenditure
Revenue
Capital expenditure Expenditure
·
Purchase of assets ·
Payment ofexpenses
·
Hem lasts for more
·
Hem lasts for less than a
year
than a
year
short term and long term for finance
·
Short term finance
·
long-term finance
Cash profit
I
Administration, bankruptcy and liquidation
Fail due to lack of finance:Administration
Appointedto keep the business operational and
find a
buyer. If this
proves impossible:Bankruptcy
legal process begins:liquidation ofthe assets
Managing working capital
Current assets:Cash,
inventory, trade recievable
Fashl
--
All
product Materials
Ion credit]
60days Ion credit]
30
T/R 50 days
90
A T/P
↳ Nation
-> Receiving quicker
-> Paying later
=>
4WC
Managing working capital -
Inventory can be managed by:
keeping smaller inventory levels
·
·
Use JIT
Trade payables (Pay later)
Delaying payments to supplier to increase
·
the credit period
Only buying goods/parts from suppliers
·
who will offer credit
Trade receivables (Receive payment quicker (
·
Only selling products for cash andnot on credit
·
Reducing the creditperiodoffered to customers
Capital expenditure us Revenue expenditure
Revenue
Capital expenditure Expenditure
·
Purchase of assets ·
Payment ofexpenses
·
Hem lasts for more
·
Hem lasts for less than a
year
than a
year
