HT3.1- Understanding Finance Sources and Concepts

What is a common form of debt financing for businesses?

• Equity shares

• Bank loans

• Venture capital

• Personal savings

Which of the following is a source of venture capital?

• Family and friends

• Angel investors

• Bank overdrafts

• Personal savings

What is the primary advantage of using personal savings for financing a business?

• No interest payments

• High risk of losing money

• Involves complex legal agreements

• Requires collateral

What is the definition of profit in a business context?

• Total revenue minus total expenses

• Total expenses minus total revenue

• Total assets minus total liabilities

• Total liabilities minus total assets

How is revenue different from profit?

• Revenue is the total income before expenses, while profit is the income after expenses.

• Revenue is the income after expenses, while profit is the total income before expenses.

• Revenue and profit are the same.

• Revenue is the total expenses, while profit is the total income.

What does the break-even point represent in a business?

• The point where total revenue equals total expenses

• The point where total assets equal total liabilities

• The point where total revenue exceeds total expenses

• The point where total expenses exceed total revenue

Which of the following is NOT a debt financing option?

• Issuing bonds

• Bank loans

• Retained earnings

• Credit lines

If a company has a revenue of £500,000 and expenses of £350,000, what is its profit?

• £150,000

• £850,000

• £350,000

• £500,000