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--ROLE OF FINANCE IN BUSINESSES--
--ROLE OF FINANCE IN BUSINESSES--
--WHY IS IT NEEDED?--
--WHY IS IT NEEDED?--
'FINANCE' refers to the money that a company requires for business activities, including...
To SET UP A BUSINESS will require start-up capital involving cash injections from the owner(s) to purchase essential capital equipment and possibly premises.
To FINANCE WORKING CAPITAL "pay the bills" – the day-to-day finance needed to pay bills and expenses and to build up stocks.
To FINANCE BUSINESS EXPANSION both INTERNAL and EXTERNAL (Via TAKEOVER) needs finance.
To ENSURE SURVIVAL in situations when there is a need for immediate cash to keep the business stable such as an unexpected fall in demnd or a large customer fails to pay for goods etc...
etc...
--TASK--
--TASK--
Watch the video of Shark tank and write a brief paragraph for each product, explaining which of the REASONS above, and why they need finance.
--CAPITAL/REVENUE EXPENDITURE--
--CAPITAL/REVENUE EXPENDITURE--
--CAPITAL--
--CAPITAL--
CAPITAL EXPENDITURE is the purchase of FIXED ASSETS, which are that are expected to last for more than one year, such as buildings and machinery. There are many reasons why a firm needs to finance capital expenditure such as:
To ADD EXTRA CAPACITY capacity as the business grows.
To improve efficiency by USING the LATEST TECHNOLOGIES, including IT SYSTEMS and production technologies.
To REPLACE WORN-OUT, DAMAGED and/or OBSELETE (outdated) capital equipment and machinery.
To COMPLY WITH LEGISLATION and regulations, such as GREEN TECHNOLOGIES.
--REVENUE--
--REVENUE--
REVENUE EXPENDITURE is spending on all costs and assets other than fixed assets, and it includes wages, salaries, raw materials, rent and utility bills.
It relates to costs that keep the operations running on a daily basis.
--TASK--
--TASK--
Make a two column table with 5 examples of capital expenditures on the left and 5 examples of revenue expenditures on the right that TES has/regularly makes. Note for capital expenditures have at east one example for each type listed above
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