sourcesoffinancing-240307095529-f95dc665 (1) (1).pdf

offinancing-240307095529-f95dc665 (1) (1).pdf

1. DEPARTMENTOF
ELECTRONICSANDCOMMUNICATIONENIGINEERING
BUSINESSECONOMICSANDFINANCIALANALYSIS
Topic
Exploringthecaptialsources:Financingoptions
growingbussisiness.
PresentedBy
K.Lokesh22S11A04F4
N.Lalitha22S11A04F3
D.Madhav22S11A04F6
. B.madan22S11A04F5
G.Manikanta22S11A04F8

2. SOURCESOFFINANCE
SOURCESOFFINANCE–ThisisWHEREweget
financefrom

3. WhyDoBusinessesNeedFinance?
Businesses
needmoney
for…
Forstartingup Everydaybillpayments
Expansion
InternalGrowth
Takeoverbid
Replace
machinery/equipment

4. SourcesofFinance
SourcesofFinance
canbeeither:
Internal External

5. InternalSourcesofFinance
INTERNALSOURCESOFFINANCE–Financewhich
israisedinternally,itdoesnotincreasethedebts
ofthebusiness.
Examples:
Retainedprofit
Personalsavings
Saleofunwantedassets
Saleandleaseback

6. ExternalSourcesofFinance
EXTERNALSOURCESOFFINANCE–Financeprovided
bypeopleorinstitutionsoutsidethebusiness,creates
adebtthatwillrequirepayment.
Examples:
Loans
Overdraft
Shares
Debentures

7. TimePeriodsforFinance
Financeisgenerallyconsideredtobe
either:
MEDIUM
TERM
3–10YEARS
LONG
TERM
OVER10YEARS
SHORTTERM
UPTO3YEARS

8. Short-termFinance


Short-termFinanceisneededfortheday-to-day
runningofabusinessandisusuallyforaperiodof
upto3years
Inordertounderstandshort-termfinanceitis
necessarytounderstandtheconceptofCASH
FLOW

9. CashFlow
CASHFLOW–Abusinessneedssufficient
inflowsofcashtofinanceitsday-to-day
outgoings.
BUSINESS
INFLOWSrefersto
moneyreceivedbythe
business
•
•
•
•
EXAMPLES:
Salesrevenue
Capital
Loans
Grants
OUTFLOWSrefersto
moneypaidoutby
thebusiness
•
•
•
EXAMPLES:
Purchases
Rent&Rates
Wages&Salaries

10. THANK
YOU