Internal and External Budget

• Inner financial resources: are money that come from within the business. Such as business can sell items that owns that are no longer seriously needed to release cash. • External economical sources: are funds identified outside the organization, e. g. from banking institutions giving financial loans

Short term

Medium term Long-term

External

• Overdraf

• Short-term

Loan

• Hire

Purchase

• Mediumterm Mortgage

• Retain the services of

Purchase

• Leasing

• Long-term

Financial loan

• Stocks

• Debentures

internal

• Trade Credit rating

• Maintained

Profit

• Retained

profit

• Sale of

Assets

• Sale and

Leaseback

Resource 1: External financial

supply

Loan: an external financial source of my picked company (formula 1) can be loans as they need to buy fresh car as they may have the fund as of yet and a loan is " An amount of money that's borrowed from your bank, in that case repaid (with interest) over the set amount of time” this would be short term as if its intended for items when a smaller characteristics and long term for booking a land etc . …

Advantage

Easy and quick to set up because they will

are termed as a big successful business

it will be easier and speedy for them to obtain

loans since banks will certainly trust these to

pay it back

Large amounts involving can be

took out from the financial institution due to the

scale there firm

Methodized repayment term this is great

because the organization dose not need to

pay out the money back all at once but at a

convenient repayments

Disadvantage

• Interest payable meaning the business

has to pay much more than they will borrowed

through the bank

• If repayments cannot be held up, the

business hazards getting a credit rating

rating or perhaps being made insolvent

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