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Sources of Business Finance

    • Question 1
    CBSEENBS11004234
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    Give meaning of business finance.

    Solution
    Business finance is that business activity which is concerned with the acquisition or conservation of capital funds in meeting the financial needs and overall objective of a business enterprise.
    Question 2
    CBSEENBS11004235
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    Give meaning of fixed capital.

    Solution
    The fixed capital of a business is invested in permanent assets, such as, land and buildings, plant, machinery, furniture, fixtures, patents, etc. It is so called because the assets in which it is invested are fixed, in the sense that they are not meant to remove from the business.
    Question 3
    CBSEENBS11004236
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    Give meaning of working capital.

    Solution
    Working capital is required by a business for the purchase of raw materials and for meeting day-to-day expenses such as wages, salaries, rents, taxes, interest, etc. It may be defined as the capital invested in the working or current assets, such as raw materials, semifinished goods, finished goods, debts recoverable from the customers to whom goods have been sold on credit, and so on. Working capital is also referred to as the circulating capital or revolving capital.
    Question 4
    CBSEENBS11004237
    Wired Faculty App

    Give types of working capital.

    Solution
    Types of working capital are :

    1. Permanent or fixed working capital.
    2. Variable working capital.

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