Snmek 1
Anglicky v odbornch pedmtech"Support of teaching technical
subjects in EnglishTutorial:Business Academy
Topic: Business financing
Prepared by:Ing. Marcela Zlatnkov
Projekt Anglicky v odbornch pedmtech, CZ.1.07/1.3.09/04.0002je
spolufinancovn Evropskm socilnm fondem a sttnm rozpotem esk
republiky.
Business financing is acquisition and spending of financial
resources.
It takes place at:a/ setting up a businessb/ ordinary course of
a businessc/ expansion of a business and its activitiesd/
dissolution of a businessBusiness financing
2Depending on who it belongs to:Personal OtherDepending on how
long they are available in the
business:Long-termShort-termDepending on where they come
from:InternalExternalAs shown in the companys balance
sheet:BalanceNon-balanceDivision of financial funds
It consists in getting money from investors and its spending on
equipment of the business by means of long-term and circulating
propertyLong-term and circulating property should be financed from
long-term funds, especially from basic capitalBasic capital is
formed by financial and material contributions of proprietors
(partners, shareholders, members).Part of the property may be
financed from other funds, such as bank loanIn this case, bank
examines the business plan of the company and will require
financial security of the loan by the companys propertyFinancing
when starting up a business
In the ordinary course of business circulating material performs
cycle. Fixed assets and human labour are also involved in this
cycle. It is connecetd to circulation of money too.Financing
ordinary course of business rests in getting money from sales or
short-term loans and its spending on the purchase of material and
services, recovery investments, payment of wages, payment of taxes,
payment of interests, repayment of loans, payment of dividendsIf
the company reaches profit, it gets more money on ordinary activity
than it must spendFinancing ordinary course of business
The company may be expanded by:Actual developing investments (in
long-term property, increase of stock)Financial assets (buying
stocks and shares of other companies)It is long-term assets which
should be financed from long-term funds. These funds may
include:Non-split profit from previous yearsOther proprietors
contributionsBond issueLong-term bank loansFinancing to expand
business
Businesses as legal persons are usually cancelled by voluntary
decision of the competent authority of the company, or by courtIt
is cancelled either with or without liquidationLiquidation is the
process of liquidation of the business estate . Special financial
statement is elaborated, liquidator is appointed and he or she
gradually sells business property, pays its obligations and looks
into liquidation balance.Financing business when liquidating means
getting money by selling business property, its use to cover its
liabilities and payment of shares on liquidation balanceFinancing
at business dissolution
The company can provide its long-term solvency:If long-term
assets are financed from long-term sourcesIf it makes profitIf it
observes a certain ratio between own and foreign capital, that
means it will not exceed certain level of indebtednessIt also
depends on these variables how quickly the company can expand so
that it does not endanger its solvencyEnsuring the solvency of the
company
1/ State which sources of the company cannot be used to finance
business
2/ Describe the course of issue, sale and paying of bonds
3/ Describe the statutory authorities of different types of
companies
4/Name some short-term sources of the companyTasks:
Biovec, K. Pehled uiva k maturitn zkouce z ekonomiky. Fortuna,
2004. ISBN 80-7168-747-2. varcov Jena, ing a kolektiv, Ekonomie,
strun pehled. Ing. Jena varcov, Ph.D., CEED nakladatelstv a
vydavatelstv, 2006. ISBN 80-903433-3-3.Klnsk Petr, Munch Otto,
Ekonomika pro obchodn akademie a ostatn stedn koly 1-4. Fortuna,
2003, ISBN 80-7168-862-2.
Bibliography: