Importance Of Financial Aspect In Business Planning 6b1x23

IMPORTANCE OF FINANCIAL ASPECT IN BUSINESS PLANNING Finance is the most important aspect of entrepreneurship, because a business would not be established without funds. It helps business achieve their goals by providing the funding they need to achieve them. Without funding, business cannot be successful.

Arbitrage - Abstract digital information to represent Business Financial as concept.  The word Arbitrage is a part of stock market vocabulary in stock Capital – is the amount of cash and other assets owned by a business.  Can also represent the accumulated wealth of business, represented by its assets less liabilities.  Can also mean stock or ownership in a company.  In general, capital is accumulated assets or ownership. Cash Flow – The movement of cash into or out of a business, project, or financial product.  The (total) net cash flow of a company over a period (typical a quarter or a full year) is equal to the change in cash over this period.  Positive – if the cash balance increase (more cash becomes available).  Negative – if the cash balance decreases. Debt – Refers to borrowing, usually made to run a business or make new investments.

 The borrower receives the amount required, usually a large capital sum upfront, and agrees to repay the same with applicable interest in installment. Financial modeling – is the task of building an abstract representation (a model) of a real world financial situation.  This is a mathematical model designed to represent (a simplified version of) the performance of a financial asset or portfolio of a business, project, or any other investment. Entrepreneurship – is the process of starting a business or other organizations.  Develops a business model, acquires the human and other required resources, and is fully responsible for its success or failure. Funding – Getting money to run the business or activity.  Usually this is money before the event takes place to put the event on.  Includes: Patrons, Investors, Bank loans, Sponsorships, Donors, and Fundraisers. Interest  Earning Interest – When you save money in the bank or building society, they will pay you so let them look after your money. This is called interest. Example: if you save $100 in an with an interests rates of 5% after a year you will have $ 105.  Paying Interest – If you borrow money, banks, or building societies will charge you for this. The extra charge is also called interests. Example: if you save $100 in an with an interests rates of 15% after a year you will owe them $ 115. Investment – involves making a sacrifice of in the present with the hope of deriving future benefits. Liquidity – How quickly and easily an asset can be converted to cash.  Less Liquid – Investments – saving tools = More liquid