Lesson 3

通報

問題一覧

How to raise capital for the business

- Personal Savings - Borrow from Family and Friends - Business loan from a bank

The most common source of funds

personal savings

The easiest way to source funds especially for an entrepreneur whose family is financially secure

Borrow from family and friends

The most popular and the most difficult source of business capital in the Philippines

business loan from a bank

5 C's of Credit

- Character - Capacity - Capital - Collateral - Conditions

It refers to a borrowers reputation or track record for repaying debts

Character

It measures the ability of a borrower to repay a loan

Capacity

Down payment indicate the borrowers level of seriousness which can make lenders more comfortable in extending credit

Capital

Any personal assets that the borrower pledges bin order to support the loan

Collateral

The state of the overall economic environment specifically the factors that might have affect your industry and business

conditions

Other sources of capital

- Home equity loan - credit card - venture capital - angel investors - small business loans from government agencies

A loan that uses your home equity as your guarantee that the money you borrow will be paid back

Home equity loan

Issued by a financial institution that let's you borrow money to make a purchase

Credit card

Is a type of financing given from investors to business that are in dire need of support or other small businesses

Venture capital

Is not always in the form of money, sometimes, it could be in the form of technical or Managerial expertise

Venture capital

Wealthy individuals who invest their own money into companies

Angel investor

Business - oriented agencies SSS, pag ibig fund, land bank

Small business loans from government agencies

Predicting what will happen in the future by gathering and analyzing past and current data

forecasting

Is developed by identifying trends in past data and using information to predict a company's financial position in the future

Financial Forecasting

2 types of financial forecasting

1. Qualitative method 2. Quantitative method

Involves gathering information that cannot be measured such as consumers opinion about new packaging for a product

Qualitative method

Uses data to predict future results Ex: Using past sales volume for the upcoming year

Quantitative method

Implies that the body of the forecasting knowledge lies on the solid ground of quantitative forecasting methods and their utilization for various business situations

Science

Represent a combination of a decision makers experience, logic, and intuition to supplement the forecasting quantitative analysis

art

Important consideration in making expansion leap

- Revenues - Cost - Expenses

Shown usually as the item in an income statement from what all charges, cost and expenses are subtated to arrive at net income

revenues

An amount that has to be paid

cost

Incurred by a business

Expenses

- Rent - Phone and utilities - Equipment - Fixtures

A portrait of the financial standing of business at a point in time

balance sheet

It shows what your business own and what it owes Will show a summary of a company asset, liabilities and owners equity at a specific point in time

Balance sheet

Are items owned by a business

Assets

Are Items that are expected to be sold or turned into cash within one year (Short term)

current assets

Is considered the most liquid of all assets

Cash

Two type of assets

a. Current assets b. Non Current assets

Money owed by customer who purchased goods or services on credit that was provided by the company

Account receivable (A/R)

Example rent or insurance

Prepaid expenses

Ex of short term assets

1. account receivable 2. prepaid expenses

Are item that are not expected to take more than one year to be consumed or converted into cash (Long term assets)

Non current assets

A loan due to creditors

Current liabilities

Ex of current liabilities

1. account pyable 2. taxes payable

Short term loan typically owed by the business from purchases made on credit from suppliers or vendors

account payable

Taxes that have accrued but have not yet been paid

Taxes payable

Ex of non current liabilities

1. Retained earnings 2. current portion of long term debt 3. owners equity

A debt that is due more than one year (Long term liabilities)

Non current liabilities

Warning that are reinvested in the business after the deduction of any dividends

retained earnings

Amount of principal that will be due within one year of date of the balance sheet

Current portion of long term debt

Net worth or paid in capital and is the amount owners have invested in the business

owners equity

Current assets

cash account payable inventory supplies

Non current assets (long term )

land buildings and improvements furniture and fixtures general equipment intangible assets

Are debts for the business and will include short term and long term liabilities

liabilities

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