1.Business Finance

1.Business Finance - Business Finance K. R. Sharma Business...

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Business Finance K. R. Sharma
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Business Finance Finance is basic to business. All business enterprises, manufacturing, trading or service, big or small, require funds for their operations. Initially finance is needed to set up the enterprise and once established for working. Besides business enterprises finance is also needed by governments, households
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Real Sector and Financial Sector Real sector Financial Sector Structure Policies Structure Policies 1.Primary 1. Regulators Monetary Policy Agriculture Agri. Policy Credit Policy Mining Mining Policy
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Overview of Financial System Market Regulator Savers Intermediaries Investors 1.Individuals 1. Individuals 2. Households Financial 2. Households 3. Firms Market 3. Firms 4. Institutions 4.
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Role of Financial Institutions in Economy 1. Funding Development Activities in - Agriculture - Industry - Trade & Commerce - Infrastructure 2. Creation of Employment Potential 3. Resource Generation and Distribution 4. Entrepreneurship Development 5. Financial Inclusion –Weaker Sections &
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Role of Financial Institutions for Business 1. Direct Funding Support - Long & Medium Term Loans
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Requirement of Funds for Business Funds are required in business at the beginning for creating and acquiring essential assets and infrastructure for business. Later on funds are required for expansion, modernization and diversification of business and for undertaking new projects. Funds are also required for conducting day to day operations or for maintaining inventory for sale, giving credit and meeting operating, financing and administrative expenses. It may be noted that the requirement of first two types is for long term funds, while the third type
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Sources of Funds for Business The sources for meeting the requirement of funds for business may broadly be classified in to internal sources and external sources. Large and profitable enterprises may provide funds from internal sources for meeting the requirement of small projects, even for large projects, for increasing capacity, diversification, etc. However, in case of new enterprises and small enterprises, funds for investment in most cases have to be obtained mainly from external sources. SMEs are worst sufferer in this matter.
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Requirement of Funds and Source of Funds The source of funds most times depends upon the nature of requirement of funds. For instance the requirement of large and long term projects is generally met by raising long-term funds from outside, where as for modernisation, expansion etc., of business, or small projects the funds may be provided from internal accruals. The requirement of day to day operations
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Sources of Long term Funds for Business The long term funds, depending upon the source from which these are available, are classified as equity and debt . Traditionally corporate sector raised
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1.Business Finance - Business Finance K. R. Sharma Business...

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