Homework # 4 Unit: Finance and accounting

fundamentals

• What is meant by the term ‘finance’.

• Briefly explain the importance of a finance to business.
• Distinguish between internal and external method raising the finance.
• Briefly explain the advantages and disadvantages of raising finance
through internal sources.
• Briefly explain the advantages and disadvantages of raising finance
through external sources.
• Define the term ‘liquidity’ and state any one formula to calculate liquidity
of the business.
• What is net profit of the business and mention formula to calculate net-
profit margin of the business.
• Distinguish between cash and profit.
• Define the term cash-flow forecast.
• What is meant by the term ‘cash-flow problem’
• Briefly explain how an organization can improve cash-flow of the
business.
• What is meant by the term ‘bank loan’.
• What is meant by the term ‘debenture’.
• Explain the factors that influence the sources of finance.
• Distinguish between revenue and capital expenditure of a business.

Saeed Surti