Business Funding Strategies: Types of Capital & Financing Options
Understanding Business Funding: Sources and Types
Key Characteristics of Funding
- Funding: Obtaining financial resources necessary to carry out an investment or business activity.
- Duration:
- Permanent Capital: (e.g., members’ contributions, self-financing, long-term debt)
- Current Liabilities: (e.g., debts to suppliers and creditors)
- Ownership:
- Own Resources: (e.g., partners’ capital, self-financing)
- External Resources: (e.g., bank loans, bonds)
- Origin: External and Internal resources.
External Funding: Short-
Read MoreUnderstanding Trade and Distribution Channels in Spain
Tema 8: Trade and Commerce
1.1 Trade: Production and Consumption Exchange
Increasing the volume of production and consumption implies a very active exchange of goods and services. This exchange is called trade. Specific markets exist where products are exposed, alongside abstract markets like stock exchanges.
Notes on Modern Trade: Today’s trade is complex, characterized by strong demand concentration, increasing specialization, trading of diverse products, global activity, and the creation of specialized
Read MoreMarket Structures: Competition, Monopoly, Oligopoly, Monopolistic
Perfect Competition: Market Fundamentals
Perfect competition is a theoretical market structure in which the following criteria are met: All firms sell an identical product (the product is a “commodity” or “homogeneous”). All firms are price takers (they cannot influence the market price of their product). Market share has no influence on prices.
Key Characteristics of Perfect Competition
- Sellers: Typically small to medium-sized firms.
- Consumers: Have many different options and extensive information
GST & Customs Duty: Essential Concepts and Compliance
GST Fundamentals: Cascading Effect & Registration
Cascading Effect: Definition & Elimination by GST
Cascading effect refers to ‘tax on tax’, where a product is taxed at every stage of the supply chain without allowing credit for the tax paid at the previous stage.
Example Before GST Implementation
- A manufacturer pays excise duty on goods.
- A wholesaler buys it and pays VAT on the total price (which includes excise duty).
This resulted in double taxation.
How GST Eliminated Cascading Effect
GST is
Read MoreUnderstanding Exchange Rates and Their Impact on Global Trade
Understanding Exchange Rates
Exchange rates: The price of one currency in terms of another currency.
How Exchange Rates Affect International Trade
An increase in the exchange rate of the Euro against a foreign currency would appreciate the Euro. This makes imports cheaper but exports more expensive, potentially destabilizing the current account.
Conversely, if the Euro depreciates, exports become cheaper, potentially increasing export volume. However, imports become more expensive. This effect is influenced
Read MoreFoundations of Firm Economics: Production, Costs, and Market Structures
Firm Fundamentals: Core Economic Concepts
Key Economic Definitions
- Enterprise: An institute that hires and organizes productive resources to produce and sell goods and services.
- Opportunity Cost: The highest-value alternative forgone when making a choice.
- Explicit Costs: Direct monetary payments for resources. The amount paid could have been spent on something else.
- Implicit Costs: Costs incurred when a company forgoes an alternative action without making a direct monetary payment.
- Economic Benefit: Equal