Question

Explain the need and purpose of business finance.

Answer 1

1. To meet unexpected needs and to take advantage of market opportunities.
2. To expand and diversify business.
3. To acquire fixed or long term assets such as land and buildings, plant and machinery, furniture, etc.
4. To meet operating expenses such as wages and salaries, rent, telephone and electricity bills, etc.
5. To acquire current or short term assets such as raw materials, cash in hand and at bank, credit sales or debtors, etc.