help pleasee! :) (1 Viewer)
- Thread starter ashleey
- Start date
Source of funds= debt or equity
Equity-(internal source of funds) eg owners equity(from owners savings) or retained profits (past profits saved for future use)
Debt-(external source of funds) eg Short term- Overdraft, commercial bills, trade credit etc
There are also other sources of funds, eg factoring (selling accounts recievable to a factor, so when accounts are paid, the money goes to the factor, but you have the cash to pay your ST funds)
& effective profitablitity management is simply the aim to maximise revenue and minimise costs, so it's all about the business trying to control it's variable costs. Some examples are: Downsizing (reducing workforce)
Multiskilling (training employees in more than one task)
Adoptiong Just In Time management (so stock comes in as you need it, decreasing warehousing costs trying to store it for when you need it)
Subsitiuting some variable costs with fixed costs (eg, using robots instead of people (you don't pay wages etc))
Setting up cost centres (managers use budgets to control cost and profit)
I hope this helps a bit, goodluck
Equity-(internal source of funds) eg owners equity(from owners savings) or retained profits (past profits saved for future use)
Debt-(external source of funds) eg Short term- Overdraft, commercial bills, trade credit etc
There are also other sources of funds, eg factoring (selling accounts recievable to a factor, so when accounts are paid, the money goes to the factor, but you have the cash to pay your ST funds)
& effective profitablitity management is simply the aim to maximise revenue and minimise costs, so it's all about the business trying to control it's variable costs. Some examples are: Downsizing (reducing workforce)
Multiskilling (training employees in more than one task)
Adoptiong Just In Time management (so stock comes in as you need it, decreasing warehousing costs trying to store it for when you need it)
Subsitiuting some variable costs with fixed costs (eg, using robots instead of people (you don't pay wages etc))
Setting up cost centres (managers use budgets to control cost and profit)
I hope this helps a bit, goodluck