Business Finance Lesson 6 Reviewer

term for Owner’s Investment in the company

• Investments

• Owner's Liability

• Owner’s Equity or Equity

• Assets

term for Debt and Equity that a company uses

• Capital Structure

• For Working Capital

• Day-to-day Operations

• Assets

it is the financing decision whether debt or equity will be used

• Capital Distribution Decision

• Day-to-day Operation Decision

• Debt and Equity Distribution

• Capital Structure Decision

It is the least expensive form of getting funds because it doesn’t require the owner to pay anyone back.

• Angel Investors

• Venture Capital

• Friends and Relatives

• Personal Savings/Funds

They are likely to invest because of relationship with owner. Also, they are patient about being paid back.

• Personal Savings/Funds

• Friends and Relatives

• Angel Investors

• Government Grants

Companies or individuals that likely to invests on young companies. They do not invest without a proven track record and prefers if the business possess a proven demand in the market.

• Government Grants

• Angel Investors

• Venture Capital

• Equity Offerings

Individuals and businesses that are interested in helping small businesses.

• Angel Investors

• Friends and Relatives

• Equity Offerings

• Government Grants

Stocks that a business sells directly to the public

• Common Stocks

• Preferred Stocks

• Stockings

• Equity Offerings

Government institutions also offers financial assistance

• Banks

• Government Grants

• Loan Sharks

• Creditors

__________ Involves borrowing funds from creditors with interest that requires to be paid on a specified time.

• Loaning

• Investing

• Loan Application

• Debt Financing