Financing the business Test your knowledge
Famous Face One: Question A D Question B Question A Question C
Famous Face One: Question A A share of the profits of a company received by people who own shares
Famous Face One: Answer A Dividend
Famous Face One: Question B D Question B Question C
Famous Face One: Question B A long term loan to the business
Famous Face One: Answer B Debenture
Famous Face One: Question C D Question C
Famous Face One: Question C The value of a business which belongs to the business owners (Clue: In a company, this would be the value of their shares)
Famous Face One: Answer C Equity (or equity capital)
Famous Face One: Question D
Famous Face One: Question D A business which collects the debts of other businesses, for which it charges a fee
Famous Face One: Answer D Factor Do you know the identity of Famous Face One?
Famous Face One is … Nelson Mandela!
Famous Face Two: Question A B Question C Question D
Famous Face Two: Question A Finance which is obtained from within the business, or from outside the business
Famous Face Two: Answer A Sources of capital Inside the business = internal source of capital Outside the business = external source of capital
Famous Face Two: Question B D
Famous Face Two: Question B Legally, renting equipment before buying it (i.e. a type of loan)
Famous Face Two: Answer B Hire purchase
Famous Face Two: Question C D
Famous Face Two: Question C Shares in a limited company where the amount of dividend paid depends upon the amount of profit made
Famous Face Two: Answer C Ordinary shares
Famous Face Two: Question D
Famous Face Two: Question D Equipment or premises are often ‘rented’ in this manner
Famous Face Two: Answer D Leasing Do you know the identity of Famous Face Two?
Famous Face Two is … Sally Gunnell!
Famous Face Three: Question A D Question B
Famous Face Three: Question A Shares in a limited company where the amount of dividend paid is fixed i.e. the dividend does not change each year
Famous Face Three: Answer A Preference shares
Famous Face Three: Question B D Question B
Famous Face Three: Question B Borrowing a sum of money which then has to be repaid, with interest, over a period of time
Famous Face Three: Answer B Loan
Famous Face Three: Question C D
Famous Face Three: Question C Profit which is kept back by a business and used to pay for investment in the business
Famous Face Three: Answer C Retained profit (or undistributed profit)
Famous Face Three: Question D
Famous Face Three: Question D A loan where property is used as security
Famous Face Three: Answer D Mortgage Do you know the identity of Famous Face Three?
Famous Face Three is … Stephen Hawkins!
Famous Face Four: Question A D Question C Question B
Famous Face Four: Question A Money which is used by someone to buy a share of what is hoped to be a growing business
Famous Face Four: Answer A Venture capital
Famous Face Four: Question B D Question C Question B
Famous Face Four: Question B Borrowing money from the bank i.e. when a business spends more money that it actually has in its current account
Famous Face Four: Answer B Overdraft
Famous Face Four: Question C D Question C
Famous Face Four: Question C The ratio of long term borrowings of a company to its share capital
Famous Face Four: Answer C Gearing ratio
Famous Face Four: Question D
Famous Face Four: Question D The ratio of current assets of a company to its current liabilities
Famous Face Four: Answer D Current ratio Do you know the identity of Famous Face Four?
Famous Face Four is … J K Rowling! (Author of the ‘Harry Potter’ books)
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