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Lecture

Business Finance Ch 12.doc


Department
Management (MGT)
Course Code
MGTA02H3
Professor
Chris Bovaird

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MGTA04
March 26th 2012
Chapter 12
Business Finance
Why Businesses Need Finance:
-Businesses must spend money weeks/months before they can collect:
-buy raw materials, hire employees, turn materials into finished goods, perform market-
ing, make sale and send invoice
-Most businesses are seasonal/cyclical:
-Retail stores: busy pre-christmas/slow Jan-Feb
-Ski Resorts: busy Dec-Mar/ slow April- Nov
-Construction: busy when warm, slow in winter
-Blue Jays: busy when winning / slow when losing
As business grow:
-need more raw materials
-need more employees
-need more plant and equipment
-need more warehouse space
..... this needs to be paid for....up front
Financial Management
What Finance Managers do:
-Determine costs of plans/ideas
-Determine if they need more money
-Decide where to get it
Sources of Finance
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