Sources of Business Finance

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12 02, 2016

Shares and Debentures-Difference

The preference shares enjoying the right to accumulate unpaid dividends in the future years are known as cumulative preference shares. On non-cumulative shares, dividend is not accumulated if it is not paid in a particular year.
11 02, 2016

Trading on Equity

Trading on Equity refers to the use of fixed cost bearing securities by the company along with share capital in the total capital, so as to provide increase in net gain to the shareholders.
10 02, 2016

Debentures – Meaning and Types

Debenture is a written instrument acknowledging a debt under the common seal of the company. It contains a contract for repayment of principal after a specified period.
9 02, 2016

Preference Shares – Meaning and Types

The preference shares enjoying the right to accumulate unpaid dividends in the future years are known as cumulative preference shares. On non-cumulative shares, dividend is not accumulated if it is not paid in a particular year.
8 02, 2016

Shares – Meaning and Types

Share is the smallest unit into which the total capital of the company is divided. For example, when a company decides to raise ₹ 10 cores of capital from the public by issuing shares, then it can divide its capital into units of a definite value .
6 02, 2016

Bank Credit

When a certain amount of money is advanced by a bank usually against security of assets, repayable after a specified period, it is known as bank loan. The borrower has to pay interest on the whole amount of loan irrespective of the amount of loan actually drawn.
5 02, 2016

Trade Credit

Trade credit means credit granted to manufacturers and traders by the suppliers of raw material, finished goods, components, etc. Such credit appears in the records of the buyer of goods as ‘sundry creditors’ or ‘accounts payable’.
4 02, 2016

Types of Business Finance

Owner’s funds are the funds provided by the owners of an enterprise, which may be a sole trader or partners or shareholders of a company. It includes profits reinvested in the business.
3 02, 2016

Types of Business Finance – Chart

Sources of Business finance can be classified on the basis of Time period, Source of generation of funds and on the basis of ownership.
2 02, 2016

Meaning of Business Finance

‘Business Finance’ refers to the amount and sources of money required for business purposes. So, it involves procurement and utilization of funds to carry out business operations effectively and efficiently.
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