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Yogita Ingle 6 years, 11 months ago
Manufacturing and trading beyond the geographical boundaries of a country is known as international business. International business refers to buying and selling of goods and services beyond the geographical limits of a country. It is also called trade between two countries.
International trade is of three types
(i) Export
(ii) Import
(iii) Entrepot (Re-export)
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Gaurav Seth 6 years, 11 months ago
Public deposits.
Fair weather friends are those persons who are your friends only when the circumstances are pleasant or profitable. The moment the situation changes, their behaviour changes. Similarly, Public deposits is an uncertain form of financing. In situation where the investors feel that company is going to incur losses, they may not be willing to invest (lend) funds and even may resort to withdrawing funds already invested.
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Gaurav Seth 6 years, 11 months ago
Share is the smallest unit in which owner’s capital of the company is divided. A share may also be defined as a unit of measure of a shareholder’s interest in the company.
According to Companies Act, a public company can issue two types of shares.
(i) Equity shares
(ii) Preference shares
Equity Shares Equity shares is a common security issued under permanent or owner’s fund capital. Equity shares are the most important source of raising long term capital.
In Companies Act permitting companies to issue two categories of equity shares.
(i) Equity shares with equal rights.
(ii) Equity shares with differential rights as to divided.
Preference Shares Preference shares are those shares which get preference over equity shares in respect to
(i) The payment of dividend.
(ii) The repayment of investment amount during winding up.
Different features of preferences shares are
(i) Fixed rate of dividend
(ii) No security
(iii) Voting rights
(iv) Hybrid security
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In general, finance may be defined as the provision of money at the time it is wanted. However, as a management function it has a special meaning, finance function may be defined as the procurement of funds and its effective utilization. Some of the authoritative definitions are as follows :
“Business finance is that business activity which is concerned with the acquisition and conservation of capital funds in meeting the financial needs and overall objective of the business enterprise.”
“Business finance is the business activity which is concerned with planning, raising, controlling and administration of funds used in the business.”
The various activities for which finance is required may be related to one or more of the following purposes :
1. Purchase of fixed assets, such as land, building, plant, machinery, furniture, fixture, etc.
2. Meeting the cost of current assets e.g. inventories, account receivable, etc.
3. Meeting the cost of formation of a company e.g., drafting of legal documents, registration fees, stamp duty etc.
4. Meeting the cost of raising finance e.g., underwriting commission, brokerage etc.
5. Purchase of intangible assets like goodwill, patents, copyright, etc. becomes easy.
6. Providing for the growth and expansion the business.
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Gaurav Seth 7 years ago
The person who carries on wholesale trade is known as wholesaler. A wholesaler provides many valuable services to the manufacturer as well as the retailer.
Services provided by wholesalers are as follows:
- Buying and assembling : The wholesaler buys the product from the manufacturer and collects the same at one place and supplies goods to the retailers according to their requirement.
- Storage function : The wholesaler also performs the storage function. The goods are purchased by the wholesalers from the manufacturers and stored at warehouses in order to meet the demand of retailers. The wholesalers act as bridge between the production and consumption of goods.
- Breaking the bulk : The wholesaler purchases goods from manufacturers in bulk and avails discounts. He sells goods in small quantities to the retailers which saves the retailers from maintaining large stocks.
- Advertisement : A wholesaler undertakes advertising and sales promotion of the product which automatically result in the increase in sales.
- Market information : Wholesalers inform the retailers about the introduction of new products in the market. He also gets feedback from the retailers about the needs and preferences of customers. He passes the information to the producer to make necessary changes in the products.
- Risk bearing : The wholesalers have to maintain optimum levels of stock in their godowns to meet the demands of the retailer. The retailer’s risk of maintaining godowns, price fluctuations, etc., are reduced to a great level.
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Gaurav Seth 6 years, 11 months ago
Following risks can defaced by Meeta
(i) Natural Risks Meeta can face those risks which are beyond the power of man such as seasonal change, natural calamities, geographical changes, etc.
(ii) Human Risks Business is the collection of several individuals. Meeta“surely be having several individuals collectively in starting a business. It contributes a lot and this may lead to losses due to, carelessness, dishonesty, impatience strikes, riots, etc on the part of human beings.
(iii) Economic Risks Meeta can also face economic risk as finance is the foremost requirement in setting a business. This risk is related with the concept that whether it is beneficial to invest in business or not.
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