write notes of source if finance of 11th commerce
Answers
. Business Finance It refers to capital funds and credit funds invested in the business.
According to BO Wheeler, “Finance is thai business activities which is concerned with acquisition and conservation of capital fund in meeting the financial needs and over all objectives of business enterprise.”
The financial needs of a business can be classified into two categories.
(i) Fixed capital requirement
(ii) Working capital requirement
Sources of Buisness Finance. 1. Business Finance It refers to capital funds and credit funds invested in the business. ... The financial needs of a business can be classified into two categories.
sources of finance. the provision of finance to a company to cover its short-term WORKING CAPITAL requirements and longer-term FIXED ASSETS and investments. In financing their business operations, companies typically resort to a mix of internally generated funds and external capital.
NEED OF BUSINESS FINANCE:
1. Fixed Capital Requirement: In order to start a business, funds are needed to purchase fixed assets like land and building, plant and machinery.The funds required in fixed assest remain invested in the business for a long period of time.
2. Working Capital Requirement: A business needs funds for its day to day operation. This is known as working Capital requirements. Working capital is required for purchase of raw materials, to pay salaries, wages, rent and taxes.
3. Diversification: A company needs more funds to diversify its operation to become a multi-product company e.g. ITC.
4. Technology upgradation: Finance is needed to adopt modern technology for example uses of computers in business.
5. Growth and expansion: Higher growth of a business enterprise requires higher investment in fixed assets. So finance is needed for growth and expansion.
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