BU121 Study Guide - Midterm Guide: Free Cash Flow, Cash Flow, Contribution Margin
Document Summary
Principles that apply to inancing for an entrepreneurial venture. Diference b/w cash and proit and why that maters. How and when to determine breakeven for a business and how to use it: what drives breakeven and why and how would trade of risk for return. Kinds of decisions that can be made using contribuion analysis and how to use it to make decisions. 7 principles of entrepreneurial finance: real, human and inancial capital must be rented" from owners. Human capital = have to pay employees fair wage; pay yourself (how do u get value out of it) Financial capital = costs associated with business: risk and expected reward go hand in hand. Returns expected in nv are high; must compensate for risk: while accouning is language of business, cash is currency. Need posiive cash low: nv inancing involves search, negoiaion and privacy. Search for someone how will give you the inancing takes ime; very ineicient.
