Presentation on theme: "This lesson we will be learning about... Raising Finance (Which is suitable) What are ‘cash flow problems’"— Presentation transcript:
This lesson we will be learning about... Raising Finance (Which is suitable) What are ‘cash flow problems’
Candidates need to be familiar with the main methods that a large business might use to raise funds. These include: retained profits, a new share issue, obtaining a loan and share capital. Candidates should be able to recognise the use and disadvantages of each method for a given situation. NO IDEA I NEED HELP NEVER HEARD OF IT OK I CAN DO THIS WITH SUPPORT SOME GUIDANCE NEEDED NEARLY AT MY TARGET GOT IT! VERY CONFIDENT WILL HIT MY TARGET GRADE EXCEED TARGET
NO IDEA I NEED HELP NEVER HEARD OF IT OK I CAN DO THIS WITH SUPPORT SOME GUIDANCE NEEDED NEARLY AT MY TARGET GOT IT! VERY CONFIDENT WILL HIT MY TARGET GRADE EXCEED TARGET Success Criteria < C All definitions are clear Exam context clear C > Should be able to include examples to support understanding B > Should be in a business context A >QOWC and SPAG
What situations might arise which need funding?
What situations might arise which need funding? New product development Advertising campaigns Growth to another area of business (diversification) New premises More employees (increased production) Financial hardship (recession, natural disaster)
KEY TERMS Equity Capital / Share Capital – Funds raised by issuing shares, in return for cash. Therefore selling a proportion of the business. Over drafts – An agreement with the bank, to use additional funds in your bank account. Going into a negative balance. This is short term and not suitable for large amounts. Loans – Borrowing of money from a financial institution e.g. Bank Retained Profits – Profits from the previous years trading which have been saved to be reinvested in the business.
Situations and Suitable Funding 1.JOINER - A huge bill will leave our account before a contract pays up next month. 2.TAXI FIRM - We need 3 more cars to cover increased demand. 3.PRIMARK - We want to grow globally and hit the US market. 4.BARBIE – We want to product and manufactory a new doll for Christmas