Sources of Finance

Front

What are the two main categories of sources of finance for business enterprises?

Back

Internal and external sources of finance.

Front

What is the primary internal source of finance for a business?

Back

Sales of inventories or services.

Front

What is an example of a company that liquidated its capital assets to obtain cash?

Back

Malaysia Airlines Bhd. sold six Airbus A380s.

Front

What are external sources of finance?

Back

Funds or capital that come from people or institutions outside of the business.

Front

What is equity financing?

Back

The process of obtaining funds by selling shares of the business to individuals or the public.

Front

What are angel investors?

Back

Wealthy individuals who purchase large amounts of shares in businesses they believe have high potential returns.

Front

What is crowdfunding?

Back

A method of raising funds from a large number of people, typically through online platforms.

Front

What is venture capital?

Back

Funds pooled from a smaller number of investors to invest in businesses expected to grow rapidly.

Front

What is an Initial Public Offering (IPO)?

Back

A process that allows companies to raise funds by offering shares to the general public.

Front

What is one advantage of raising equity finance?

Back

Less credit burden, as there are no loans to repay.