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Learning Objectives
To understand the concept of business finance. What is importance of finance in operation of business? What are types of business finance? What are sources of business finance?
Business Finance
According to B.O.Wheeler
Business Finance is defined as that business activity which is concerned with the acquisition & conversation of capital funds in meeting the financial needs & overall objectives of business enterprise. Financial Needs of Business
Purchase of Fixed Assets Purchase of Current Assets Preliminary Expenses Cost of Financing Selling on Credit
Kinds of Finance
Working Capital
Working capital is the amount of funds invested in the current assets of a business. It is a short term capital. Types of Working Capital
Revolving Capital
As the capital is repeatedly invested, recovered and reinvented in a going business.
Interest is paid on the borrowed capital. Interest is the payment made for the use of money. Why Interest Paid
Borrowed Capital
Loans from industrial and Financial