Business Finance Overview

Flashcards covering key concepts in business finance, including definitions and importance of various types of capital.

Business Finance

The money and credit employed in business firms to carry out operations smoothly.

Fixed Capital

Funds required for acquisition of fixed assets invested for the long-term use in the business.

Working Capital

Capital invested in current assets such as cash and inventory, required for the day-to-day operations of a business.

Sources of Finance

The different means through which businesses acquire capital, which can include personal savings, loans, and shares.

Importance of Finance

Finance is the lifeblood of business; necessary for the smooth operation and growth of any enterprise.

Financial Planning

The process of estimating the financial requirements of an organization and deciding how funds will be used.

Factors Affecting Capital Structure

Elements that determine the mix of debt and equity financing used by a business.

Gross Working Capital

The total amount of funds invested in current assets.

Net Working Capital

The excess of current assets over current liabilities.

Types of Working Capital

Categories of working capital including permanent, temporary, seasonal, and special working capital.