Page 19 - DMGT409Basic Financial Management

Basic Financial Management Rohit Bansal, Lovely Professional University

Notes Unit 2: Source of Finance

CONTENTS

Objectives
Introduction
2.1 Types of Business Finance
2.2 Instruments of Raising Long-term Finance
2.2.1 Issue of Shares
2.2.2 Issue of Debentures
2.2.3 Loans form Financial Institutions
2.2.4 Public Deposits
2.2.5 Retention of Profi t
2.2.6 Term Loans
2.2.7 Lease Financing

2.3 Instruments of Raising Short-term Finance
2.3.1 Commercial Papers (CPs)

2.3.2 Certificates of Deposit
2.3.3 Treasury Bills
2.3.4 Inter-corporate Deposits (ICDs)
2.3.5 Trade Credit

2.3.6 Deferred Income
2.3.7 Commercial Banks
2.3.8 Accruals
2.3.9 Factoring
2.4 Summary
2.5 Keywords
2.6 Self Assessment
2.7 Review Questions
2.8 Further Readings

Objectives

After studying this unit, you will be able to:

Discuss Long, medium and short-term sources of fi nance
Describe methods of raising long-term fi nance
Explain methods of raising short-term fi nance

12 LOVELY PROFESSIONAL UNIVERSITY