Internal Finance
Money generated from selling unwanted assets
What is sale of assets?
A common source where businesses borrow money from banks
What is a bank loan?
This document outlines the business idea and strategy
What is a business plan?
Owners have unlimited liability in this type of business
What is a sole trader?
The formula: (Current Assets - Current Liabilities)
What is working capital?
This internal source comes from profits kept in the business
What is retained profit?
Money raised by selling shares to the public
What is share capital?
A forecast showing expected cash inflows and outflows
What is a cash flow forecast?
This type of partnership requires at least one partner to have unlimited liability
What is a limited partnership?
This measures the percentage change in sales between periods
What is sales growth rate?
When owners invest more of their personal money into the business
What is owner's capital?
This allows businesses to buy now and pay later
What is trade credit?
The point where total revenue equals total costs
What is break-even point?
This form of business must have 'Limited' or 'Ltd' in its name
What is a private limited company?
Fixed costs divided by contribution per unit gives you this
What is break-even quantity?
Reducing this type of stock can improve internal cash flow
What is surplus stock?
A source of finance where you pay to use equipment without buying it
What is leasing?
This ratio measures a company's ability to pay short-term debts
What is the current ratio?
A business format where you pay to use another company's name and methods
What is a franchise?
This margin shows the profit made on each £1 of sales
What is profit margin?
This accounting method releases cash tied up in unpaid invoices
What is debt factoring?
When a business sells its debts to another company at a discount
What is factoring?
A detailed financial plan allocating resources and controlling spending
What is a budget?
This document sets out the rules and purposes of a limited company
What are articles of association?
A measure comparing this year's figures with last year's as a percentage
What is year-on-year comparison?