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Finance Articles;

Balance sheet

Balance sheets provide a snap shot of the assets and liabilities of a business at a point of time.

Bank loans and overdrafts

A bank overdraft is a limit on borrowing on a bank current account. With an overdraft the amount of borrowing may vary on a daily basis.

Breakeven

A business can work out how what volume of sales it needs to achieve to cover its costs. This is known as the break even point.

Business Costs

A business has many different costs, from paying for raw materials through to paying the rent or the heating bill.

Choosing the right kind of finance for a business

A business needs to assess the different types of finance based on the following criteria:

Depreciation

A fixed asset reduces in value over its useful life due to wear and tear and (when it is no longer useful) obsolescence.

Equity finance

Equity finance is the money provided by the owners of the business.

Exit, followed by a bear

WHEN the fire is raging, it is no time to worry about water damage. Central banks and governments have flooded the system with monetary and fiscal stimulus, desperate to prevent a repeat of the Depression.

Introduction to financial accounting

Financial accounts are the records of the financial dealings of the business, their every day transactions.

Other sources of external finance

Leasing is like renting a piece of equipment or machinery. The business pays a regular amount for a period of time, but the item belongs to the leasing company.

Profit and loss account

A profit and loss account starts with the TRADING ACCOUNT and then takes into account all the other expenses associated with the business.

What is profit?

Profit is the difference between the income of the business and all its costs/expenses. It is normally measured over a period of time.

Why businesses need finance

Finance is the money available to spend on business needs.

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