Business finance is concerned with the investment and financing decision of firms. All investment must be financed.

Business FinanceIntroductionBusiness finance is concerned with the investment and financing decision of firms. alto shrinkher investment must be financed. Firm raise their finance in various ways; through short status and long term property. Because resources in this world argon scarce, investment involves choice and sacrifice. The firm must choose between allude projects; by choosing some it forgoes others. Since the firm is owned by shareholders, it is evaluate to make the decision that gives the best stream of return to them. In other words, to make the investment and financing decisions that maximizes the value of the firm.

Sources of FundThere are various sources from which a business can borrow funds for its working capital needs and for its long-term expansion. Firms can provoke external finance for their business through a build ways including borrowing (debt), military issue ordinary shares and by issuing preference shares. The difference between these methods are significant in terms of risk, required rate of return, tax treatment, voting rights attached, and precession of bring backment in the event of liquidation.

Funds may be also classified as short or long term funds. Short-term funds are those, which the business has to repay within one year. These funds are usually for businesses to return their day-to-day operations including hire of wages to employees, inventory parliamentary law and supplies.



In contrast, funds, which are repayable beyond one year, are traditionally classified as long-term funds.

Sources of fund intromit common equity (common stock and retained earnings), preferred stock, bonds, blaspheme loans etc.

Short Term FundsOverdraftAn overdraft permits a company to overdraw its compute up to a maximum line of credit concord upon with the bank. It is a convenient, flexible and there is no minimum payment amount required on overdraft. It can be cadaverous upon at any time and is ideal for day-to-day...

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