Q&A - What is a bank loan?
A bank loan is the most common form of loan capital for a business.
read more...»Q&A - What is the difference between long-term, medium-term and short-term finance?
An important consideration when obtaining finance for a business is when and for how long the finance is needed.
A useful distinction can be made between long-term, medium-term and short-term finance. The table below summarises the main examples and uses of each category:
read more...»Q&A - What can a business do to improve cash flow?
The most important part of improving cash flow is having a reliable and up-to-date cash flow forecast. This provides the information which highlights the main cash flow issues.
In terms of actions which management can take, here are the main options:
read more...»Q&A - What are the main causes of a cash flow problem?
A cash flow problem arises when a business struggles to pay its debts as they become due.
read more...»Q&A - Why is the cash flow forecast so important?
If a business runs out of cash and is not able to obtain new finance, it will become insolvent. It is no excuse for management to claim that they didn’t see a cash flow crisis coming.
read more...»Q&A - What is a cash flow forecast?
The cash flow forecast predicts the net cash flows of the business over a future period.
read more...»Q&A - What are the main types of cash flow?
The main types of cash flow can be summarised as follows:
read more...»Q&A - What is cash flow?
Cash flow describes the movements of cash into and out of a business
read more...»Q&A - What is profit and why is it important?
Profit is a very important concept for any business – particularly a start-up. Profit is the financial return or reward that firms or entrepreneurs aim to achieve to reflect the risk that they take.
read more...»Q&A - Why does a start-up often find it hard to estimate costs?
A business start-up is faced with the challenge of estimating what the costs of setting up and operating the business will be. It is not always easy.
read more...»Q&A - What is meant by total costs and how are they calculated?
The total costs of a business can be calculated by simply adding together the variable costs at different levels of output to fixed costs.
read more...»Q&A - What are variable costs?
Costs which change when output changes are called “variable costs”
read more...»Q&A - What are fixed costs?
Fixed costs do not change as output varies. In other words, they are fixed even if output moves up or down from period to period.
read more...»
