sources of business finance

Funds that are required to purchase fixed assets like land and building, plant and machinery, and furniture and fixtures is known as

• fixed capital

• working capital

A trading concern will require more fixed capital as compared to a manufacturing concern.

• True

• False

A firm with slow sales turnover, credit sales or a firm during peak season will require ___ working capital

• more

• less

Select the working capital examples

• cash

• receivables

• inventory

• land and building

Identify the characteristics of owners funds

• funds provided by owners and retained earnings

• a company has to keep collateral with the investors

• they have right to vote or participate in the management

• they get a fixed rate of interest

• it is a permanent source of capital

Who are known as residual owners?

• preference shareholders

• equity shareholders

Funds can be raised through equity issue without creating any charge on the assets of the company.

• true

• false

Name the investors who get priority over equity shareholders while paying dividend and repayment of capital

• preference shareholders

• debentureholders

• retained earnings

Which capital is known as risk capital?

• Preference share capital

• equity share capital