Flash Card Quiz: Sources of Finance

Why might businesses experience cash flow problems?

• High profits

• Poor cash management

• Excessive savings

• Low employee turnover

Which type of business is likely to have cash flow problems?

• Businesses with high liquidity

• Businesses with poor credit control

• Businesses with low expenses

• Businesses with high employee satisfaction

What is the main difference between cash and profit?

• Cash is always higher than profit

• Profit is recorded when earned, cash is recorded when received

• Cash and profit are the same

• Profit is always higher than cash

What does "Return on Capital Employed" measure?

• Employee satisfaction

• Profitability of a company

• Cash flow issues

• Market share

Which of the following is a source of finance?

• Employee bonuses

• Retained profit

• Customer discounts

• Office supplies

Which of the following is an example of external finance?

• Retained earnings

• Overdraft

• Internal savings

• Cost-cutting

What is a characteristic of short-term finance?

• Long repayment period

• Used for long-term investments

• Quick repayment period

• High interest rates

Which of the following is a long-term source of finance?

• Trade credit

• Overdraft

• Share capital

• Short-term loan

What is crowdfunding?

• A method of raising small amounts of money from a large number of people

• A type of bank loan

• A government grant

• A form of tax relief

Which factor influences the choice of finance used by a business?

• Employee preferences

• Market trends

• Cost of finance

• Office location