Sources of finance
what is short term finance?
This is money borrowed for one year or less
what is quantitive information?
information expressed in numbers
What is the Acid Test Ratio Formula?
Acid test Ratio =
current assets- inventory/stock ÷current liabilities
Define 'casual employment'
Casual workers/employees do not get set contracts or guarantees of work from the employer. Their hours are variable/uncertain, often called 'on-call'.
Which of the following is an internal source of finance
Overdraft
Selling Assets
Venture Capital
Crowdfunding
Selling Assets
What is a statement of financial position?
This is a summary of a businesses assets, liabilities and capital used to show the value of a company at a given time.
What does a high ROCE mean?
A high ROCE means that a company is getting high returns for the money invested.
Name 3 documents used in recruiment
1) job description
2) Person specification
3) Application form
4) Curriculum vita (CV) / resume
Name 3 reasons why a business might need funding
Expansion
Start up capital
Short term needs
Long term needs
State three uses of financial documents to owners of a business.
Applying for loans
Find areas to improve
What two options does a business have to improve their gross profit margin? Identify both
1) Increase revenue or sales
2) Decrease the costs
Name 2 advantages of internal recruitment
1) cheaper (saves on advertising)
2) internal recruits already familiar with policies, less training may be needed
3) Motivates staff if there is chance of promotion
4) The recruit's personality, work ethic, potential, etc is already familiar and known to the business
Why would a business need to expand? Give 3 reasons
Develop new products
Branch into new markets
To meet growing orders
Three Disadvantages of venture capital?
(Must be correct word for word)
Business owners have to be comfortable with sharing profit with the 'angel'
Finding a suitable 'Angel'
The owner and the 'Angel' should share the same interest.
If an Acid test is calculated, and the answer comes out less than 1.0, What does this tell us about the business?
It shows that current assets does not cover the liabilities of the business.
Define 'short-listing'
Once you have received applications, you select those who best match your needs/job description and invite them for interviews.