The five multiple objectives of business are as follows:

1. Market standing : Market standing refers to the position of an enterprise in relation to its competitors. A business enterprise must aim at stronger market standing in terms of offering competitive products to its customers and serving them to their satisfaction.
2. Innovation : Innovation is the introduction of new ideas or methods in the way something is done or made. There are two kinds of innovation in every business, i.e.,
   (i) innovation in product or service.
   (ii) innovation in the various skills and activities needed to supply them.
3. Productivity : Productivity is calculated by comparing the value of outputs with the value of inputs. It is used as a measure of efficiency.
4. Physical and financial resources : Any business requires physical resources like plants, machines, offices, etc., and financial resources i.e. funds to be able to produce and supply goods and services to its
   customers.
5. Earning profits : One of the main objectives of business is to earn profits on the capital employed.
   Profitability refers to profit in relation to capital investment. Every business must earn a reasonable profit which is crucial for its survival and growth

Professions

Professions includes those activities, which require special knowledge & skill to be applied by individuals in their occupation. Those engaged in professions are known as professionals. Professionals are generally subjected to guidelines or codes of conduct laid down by professional bodies.

Examples: lawyers are engaged in the legal profession, governed by the bar council of India & chartered accountants belonging to the accounting profession are subject to the regulations of the Institute of chartered accountants of India.

Employment

Getting remunerated in return for the work done for others refers to an employee. Employees are the people who are employed by others. Thus, people who work in factories, offices of banks, insurance companies or government department, etc at various posts are the employees of these organizations. They receive wages & salaries. Examples: working in offices, banks, insurance companies, shops, as a manager, clerk, peon, salesman etc.

Giving priority to service instead of economic self-interest’ is the characteristic of political economy

Political economy is a term used for studying production and trade, and their relations with law, custom, and government, as well as with the distribution of national income and wealth. Political economy originated in moral philosophy. It was developed in the 18th century as the study of the economies of states, or polities, hence the term political economy.

Communication : Post and Telecom Services : Communication is an important service that helps in establishing links between business men, organisations, suppliers, customers etc. Communication service provides the means of transmission of ideas and information between individuals and institutions.

We are living in the era of advanced communication which has reduced the whole world to a "global village". Through the facilities of quick exchange of information with the help of electronic media. Various communication services such as telephone, telegraph, radio, television, satellite communication, fax, e-mail etc, have transformed the modern society and have made our life quite comfortable.

For any organisation, both internal and external communication are essential. Internal communication includes messenger service, intercom, closed circuit television, internal telephone network etc. External communication systems include postal service, telegraphic service, telephone network, fax, e-mail, video conferencing etc.

We may classify the modes of communication as follows :

(i) Postal communication
(ii) Telecom or Telecommunication
(iii) Electronic communication : Fax, Internet, E-mail, Voice mail.

Entrepreneurship development is the means of enhancing the knowledge and skill of entrepreneurs through several classroom coaching and programs, and training. The main point of the development process is to strengthen and increase the number of entrepreneurs. 

This entrepreneur development process helps new firms or ventures get better in achieving their goals, improve business and the nation’s economy. Another essential factor of this process is to improve the capacity to manage, develop, and build a business enterprise keeping in mind the risks related to it.

Startup India Scheme is an initiative by the Government of India for generation of employment and wealth creation. The goal of Startup India is the development and innovation of products and services and increasing the employment rate in India. Benefits of Startup India Scheme is Simplification of Work, Finance support, Government tenders, Networking opportunities. Startup India was launched by Prime Minister Shri. Narendra Modi on 16th January 2016. 

A n s w e r
There are 5 forms of Business Organisation
The following are the Forms of Business Organisation
1. Sole Proprietorship.
2. Joint Hindu Family Business.
3. Partnership.
4. Co-operative Societies.
5. Joint Stock Compan.

Banks are called debtors as well as creditors because banks accept various types of deposits from the public such as savings account deposit, current account deposit and fixed account deposit, and pay interest on them. They are indebted to repay the depositor the amount deposited by him or her. Besides this, they grant loans and advances on the basis of the total deposits available with them. These advances can be in the form of overdrafts, discounted trade bills, cash or consumer credits, etc. 

Industries can be classified under the following types:-

1. Primary Industry

Primary industry includes all those activities, which are connected with the extraction and production from natural resources as well as reproduction and development of living organisms, plants. These industries may be further sub-divided as follows:

   (i)Extractive Industries : These industries extract or draw out products from natural sources. Extractive industries supply some basic raw-material that are mostly the products of the soil. Products of these industries are usually transformed into many other useful goods by manufacturing industries. e.g Mining etc.

   (ii) Genetic Industries : The industries remain engaged in breeding plants and animals for their use in further reproduction. For the breeding of plants, the seeds and nursery companies are typical example of genetic industries.

The NIFTY 50 is a benchmark Indian stock market index that represents the weighted average of 50 of the largest Indian companies listed on the National Stock Exchange. It is one of the two main stock indices used in India, the other being the BSE SENSEX.

1. Equity Shares: Equity shares are the most important source of raising long term capital by a company. They represent the ownership of a company and therefore, the capital raised by issue of these shares is called owner’s funds. These shareholders do not get a fixed dividend. They get according to the earnings of the company. They receive what is left after all other claims on the company’s income and assets have been settled. They enjoy the reward and also bear the risk of ownership. They have voting rights. Using their voting rights, they get participation in management of the company.
2. Preference Shares: Preference shareholders are called so because they enjoy some preferential rights over equity shares. They get dividend at a fixed rate and dividend is given on these shares before any dividend on equity shares. When company winds up, preference shares are paid before equity shares. Preference shares also have a right to participate in excess profits left after payment being made to equity shares. They also have a right to participate in the premium at the time of redemption. In lieu of these preferential rights, their voting rights are taken i.e. they are not eligible for voting. Preference shares have some characteristics of equity shares as well as debentures. They are safer investment with stable return from investor’s point of view and free from control from owner’s point of view.

Global Depository Receipts (GDR) are the depository receipts denominated in US dollars issued by depository bank to which the local currency shares of a company are delivered. GDR is a negotiable instrument and can be traded freely like any other security. In the Indian context, a GDR is an instrument issued abroad by an Indian company to raise funds in some foreign currency and is listed and traded on a foreign stock exchange.

American Depository Receipts (ADR) The depository receipts issued by a company in the USA are known as American Depository Receipts. ADRs are bought and sold in American markets like regular stocks. ADR is similar to a GDR except that it can be issued only to American citizens and can be listed and traded on a stock exchange of USA.

Indian Depository Receipt- IDR is a financial instrument. It is issued  by domestic depository to the Indian citizens against the shares of foreign company. IDR is denominated in Indian rupees. It helps issuing company, i.e. foreign companies to raise capital from Indian securities market.
 

E-banking means any user with a PC and a browser can get connected to the banks’ website to perform any of the virtual banking functions and avail of any of the banks services. There is no human operator to respond to the needs of the customer. 

lassification of Sources of Funds

Period Basis

• On the basis of period, the different sources of funds can be categorized into three parts. These are long-term sources, medium-term sources and short-term sources.
• The long-term sources fulfill the financial requirements of an enterprise for a period exceeding 5 years and include sources such as shares and debentures, long-term borrowings and loans from financial institutions.
• Such financing is generally required for the acquisition of fixed assets such as equipment, plant, etc.
• Where the funds are required for a period of more than one year but less than five years, medium-term sources of finance are used. These sources include borrowings from commercial banks, public deposits, lease financing and loans from financial institutions.
• Short-term funds are those which are required for a period not exceeding one year. Trade credit, loans from commercial banks and commercial papers are some of the examples of the sources that provide funds for short duration.
• Short-term financing is most common for financing of current assets such as accounts receivable and inventories. Seasonal businesses that must build inventories in anticipation of selling requirements often need short-term financing for the interim period between seasons. Wholesalers and manufacturers with a major portion of their assets tied up in inventories or receivables also require large amount of funds for a short period.

Ownership Basis

• On the basis of ownership, the sources can be classified into ‘owner’s funds’ and ‘borrowed funds’.
• Owner’s funds means funds that are provided by the owners of an enterprise, which may be a sole trader or partners or shareholders of a company. Apart from capital, it also includes profits reinvested in the business.
• The owner’s capital remains invested in the business for a longer duration and is not required to be refunded during the life period of the business.
• Such capital forms the basis on which owners acquire their right of control of management. Issue of equity shares and retained earnings are the two important sources from where owner’s funds can be obtained.
• ‘Borrowed funds’ on the other hand, refer to the funds raised through loans or borrowings.
• The sources for raising borrowed funds include loans from commercial banks, loans from financial institutions, issue of debentures, public deposits and trade credit.
• Such sources provide funds for a specified period, on certain terms and conditions and have to be repaid after the expiry of that period. A fixed rate of interest is paid by the borrowers on such funds.
• At times it puts a lot of burden on the business as payment of interest is to be made even when the earnings are low or when loss is incurred. Generally, borrowed funds are provided on the security of some fixed assets.

Source of Generation Basis

• Another basis of categorizing the sources of funds can be whether the funds are generated from within the organization or from external sources.
• Internal sources of funds are those that are generated from within the business. A business, for example, can generate funds internally by accelerating collection of receivables, disposing of surplus inventories and Ploughing back its profit. The internal sources of funds can fulfill only limited needs of the business.
• External sources of funds include those sources that lie outside an organization, such as suppliers, lenders, and investors. When large amount of money is required to be raised, it is generally done through the use of external sources.
• External funds may be costly as compared to those raised through internal sources. In some cases, business is required to mortgage its assets as security while obtaining funds from external sources. Issue of debentures, borrowing from commercial banks and financial institutions and accepting public deposits are some of the examples of external sources of funds commonly used by business organizations.

NEED OF BUSINESS FINANCE:

1. Fixed Capital Requirement: In order to start a business, funds are needed to purchase fixed assets like land and building, plant and machinery.The funds required in fixed assest remain invested in the business for a long period of time.
2. Working Capital Requirement: A business needs funds for its day to day operation. This is known as working Capital requirements. Working capital is required for purchase of raw materials, to pay salaries, wages, rent and taxes.
3. Diversification: A company needs more funds to diversify its operation to become a multi-product company e.g. ITC.
4. Technology upgradation: Finance is needed to adopt modern technology for example uses of computers in business.
5. Growth and expansion: Higher growth of a business enterprise requires higher investment in fixed assets. So finance is needed for growth and expansion.

FINANCIAL INSTITUTION:

The state and central government have established many financial institutions to provide finance to companies. They are called development Bank. These are IFCI, ICICI, IDBI, LIC and UTI. etc.

MERITS:

1. Long term Finance: Financial Institution provide long term finance which is not provided by Commercial Bank.
2. Managerial Advice: They provide financial, managerial and technical advice to business firm.
3. Easy installments: Loan can be made in easy installments. It does not prove to be much of a burden on business.
4. Easy availibility: The funds are made available even during periods of depression.

LIMITATIONS/ DEMERITS:
1. More time Consuming: The procedure for granting loan is time consuming due to rigid criteria and many formalities.
2. Restrictions: Financial Institution place restrictions on the company’s board of Directors.

following are the two sources of finance that an established company can opt to expand its production capacity-
- Issue of shares- the company can issue share (equity and preference) as per its requirement in order to finance its expansion project. company has to pay an annual dividend on these shares. the decision regarding providing dividend is totally in the hands of management.

- issue of debentures- another source through which a company can finance its project is Debentures, it is th fixed charge liability against which company has to pay interest on regular intervals. debenture may be issued for short term and long term period but practically it is issued for a long term period.

other sources are loan from banks, loans from financial institutions etc

As a finance manager of the company, I would advice the directors to issue the preference shares as by issuing preference shares, a company is benefited in the following ways.

1. Lifetime retention - A company need is not bound to repay the preference share capital amount during its lifetime.

2. No charge on company's assets - The preference shareholders have no right on the assets of the concerned company. So in this manner, they have no right to claim any amount (by selling-off company's assets) in case the company fails to make dividend payments.

3. No obligation - In case, the company incurs losses, then it is not required to pay dividend to its preference shareholders. 

On the other hand, debentures will not be chosen because of the following demerits of debentures.

1. ​ The legal boundation of a company to pay interest on debentures increases its payment obligations .
2. The borrowing capacity of a company gets limited with further issue of debentures.

PUBLIC DEPOSITS: The deposits that are raised by company direct from the public are known as public deposits. The rate of interest offered on public deposits are higher than the rate of interest on bank deposits. This is regulated by the R.B.I. and cannot exceed 25% of share capital and reserves.

MERITS:

1. No charge on assets: The company does not have to mortgage its assets.
2. Tax Saving: Interest paid on public deposits is tax deductable, hence there is tax saving.
3. Simple procedure: The procedure for obtaining public deposits is simpler than share and Debenture.
4. Control: They do not have voting right therefore the control of the company is not diluted.

LIMITATIONS:

1. For Short Term Finance: The maturity period is short. The company cannot depend on them for long term.
2. Limited fund: The quantum of public deposit is limited because of legal restrictions 25% of share capital and free reserves.
3. Not Suitable for New Company: New company generally find difficulty to raise funds through public deposits.

Retained Profits: For any company, the amount of earnings retained within the business has a direct impact on the amount of dividends. Profit re-invested as retained earnings is profit that could have been paid as a dividend. The management of many companies believes that retained earnings are funds which do not cost anything, although this is not true. However, it is true that the use of retained earnings as a source of funds does not lead to a payment of cash. The dividend policy of the company is in practice determined by the directors. From their standpoint, retained earnings are an attractive source of finance because investment projects can be undertaken without involving either the shareholders or any outsiders. The use of retained earnings as opposed to new shares or debentures avoids issue costs. The use of retained earnings avoids the possibility of a change in control resulting from an issue of new shares. Another factor that may be of importance is the financial and taxation position of the company’s shareholders. For example, because of taxation considerations, they would rather make a capital profit (which will only be taxed when shares are sold) than receive current income, and then finance through retained earnings would be preferred to other methods.

Advantages of Retained Earnings

• The management of many companies believe that retained earnings are funds which do not cost anything, although this is not true. However, it is true that the use of retained earnings as a source of funds does not lead to a payment of cash.
• The dividend policy of the company is in practice determined by the directors. From their standpoint, retained earnings are an attractive source of finance because investment projects can be undertaken without involving either the shareholders or any outsiders.
• The use of retained earnings as opposed to new shares or debentures avoids issue costs. The use of retained earnings avoids the possibility of a change in control resulting from an issue of new shares.

• Another factor that may be of importance is the financial and taxation position of the company’s shareholders. If, for example, because of taxation considerations, they would rather make a capital profit (which will only be taxed when shares are sold) than receive current income, then finance through retained earnings would be preferred to other methods.

Disadvantages of Retained Earnings

• A company must restrict its self-financing through retained profits because shareholders should be paid a reasonable dividend, in line with realistic expectations, even if the directors would rather keep the funds for re-investing.
• At the same time, a company that is looking for extra funds will not be expected by investors (such as banks) to pay generous dividends, nor over-generous salaries to owner-directors.
• Scope of retained earnings is limited by amount of profits. A loss incurring firm has no source called retained earnings.

• The sources for raising borrowed funds include loans from commercial banks, loans from financial institutions, issue of debentures, public deposits and trade credit.
• Such sources provide funds for a specified period, on certain terms and conditions and have to be repaid after the expiry of that period. A fixed rate of interest is paid by the borrowers on such funds.
• At times it puts a lot of burden on the business as payment of interest is to be made even when the earnings are low or when loss is incurred. Generally, borrowed funds are provided on the security of some fixed assets.