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    Unit 5: Business Finance: WWW - Carol.co - Uk

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    Unit 5: Business Finance: WWW - Carol.co - Uk

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    Sylwia Sdiri
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    9707_y03_sw_5.pdf

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    15 views3 pages

    Unit 5: Business Finance: WWW - Carol.co - Uk

    Uploaded by

    Sylwia Sdiri

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    UNIT 5: Business Finance

    Recommended prior knowledge: None – but some students may have covered similar material at IGCSE.

    The unit in context: This unit deals with the need for business finance and the main sources of it. Finance is central to business activity and the ability to
    raise capital from appropriate sources at different stages of a firm’s development and growth is one of the key determinants of a successful business.
    Although the material covered is very different from previous units there is a constant requirement to refer to the other functional areas of business and stress
    the role that adequate finance plays in successful marketing, operations management and so on. There are clear links between Business Finance and Unit 6,
    Business Accounting.

    Outline: This is quite a short unit but the concepts it contains are very important to understanding the importance of finance and the need to raise it from
    appropriate sources. The significance of liquidity to a firm’s survival and growth needs to be made clear. The importance difference between profit and cash
    needs to be emphasized from the outset. The three parts of this unit comprise: The need for business finance, sources of finance and money and capital
    market institutions.

    Learning Outcomes Suggested Teaching and Resources Online Resources


    Student Activities
    a) The need for business finance
    Students should be able to: · business finance can be effectively · Stimpson Chapter 25. The teaching of this Unit and Unit 6 will
    taught through the means of Exercises such as be aided greatly by referring to actual
    i.) analyse the need for finance
    simulated businesses “created” by Directphone, Domino’s and company accounts. These will be
    during start up and growth
    the students. The Young Enterprise “Going exclusive with ice- available from companies’ own sites.
    stages of a business.
    scheme is excellent. Starting up and cream” plus share issue Investigate accounts of two
    ii.) understand the differences operating a simple trading business – exercises on Easyjet and businesses to identify finance sources
    between revenue and capital even just making and selling cakes – Fibernet. Revision questions used – particularly a high geared and a
    expenditure – and that each can drive home the need for both P406. low geared company. Try
    require different sources of fixed and working capital. This could www.carol.co.uk and
    finance. then be extended into Unit 6 with the · Barratt and Mottershead : www.londonstockexchange.com. Use
    keeping of simple accounts for the Chapter 40 (Case Studies at your own Government sites to
    iii.) analyse the meaning and end of chapter useful but investigate financial support for
    business. Encourage students to
    importance of working capital require accounting knowledge
    “learn by doing” in this Unit and the businesses.
    and the factors that determine not yet covered).
    next Unit, in particular.
    the amount of working capital
    required by a business

    © UCLES 2003 1
    · revenue and capital spending –
    discuss by asking for as many · Jewell: Chapter 29. Be
    examples as possible from students selective about end of chapter
    using the school/college as an questions – some require
    example. detailed accounting
    knowledge.
    · small groups of students creating
    large posters of the working capital · 9707/1 Nov 2001 Q 3
    cycle for a business of their choice
    · 9707/1 June 2003 Q4

    iv.) understand the significance of · at A level the significance of the


    the difference between distinction between revenue and
    revenue and capital capital spending can be made
    expenditure effectively after dealing with profit
    and loss accounts and balance
    v.) analyse and evaluate ways of
    sheets in Unit 6 – these two types of
    managing working capital – the
    spending have different effects on
    control of working capital
    the final accounts.
    b) Sources of capital
    Students should be able to: · a well planned visit and talk from a · as above plus 9707/2 June Use bank web sites to discover
    bank manager/official can work 2001 Q2c; 9707/3 Nov 2002 financial options for industry e.g.
    i.) understand the main sources /
    effectively especially if linked to case Qc; www.natwest.co.uk and
    types of short and long term
    studies or simulations. If “Young www.barclays.co.uk. Use own country
    business finance, both internal
    Enterprise” type businesses are set · try leading banks for details of newspapers for articles on businesses
    and external their interest rates to
    up then ask the bank manager to raising finance e.g.
    ii.) analyse the advantages and judge the business plan and decide businesses and financial www.brecorder.com (Pakistan);
    disadvantages of these . whether to lend or not to each services to industry. www.buenosariesherald.com
    business (Argentina); www.bangkokpost.com
    (Thailand); www.lexpress-net.com
    · large posters of sources of finance, (Mauritius).
    short/long term and internal/external
    can be kept in class and act as a
    useful revision source.

    © UCLES 2003 2
    iii.) evaluate these sources of · past paper 3 case studies can be
    finance and make used as business scenarios.
    recommendations of suitable Students can be asked to suggest
    finance to meet particular the most suitable sources of finance
    business requirements for each business, assuming it is
    planning to expand
    iv.) analyse and discuss the
    factors that influence the
    finance decision
    c) Money and Capital market institutions
    Students should be able to: · newspapers can provide useful · as above Try bank sites plus
    source material – articles on finance www.londonstockexchange.com and
    i.) understand the functions of
    and institutions as well as adverts for http://www.worldbank.org
    banks and specialist lending
    banks and specialist lending
    institutions.
    agencies. Students need to question
    ii.) understand the functions of the why there is such a range of
    Stock Exchange institutions and their functions.

    iii.) analyse the role of the World · simple treatment only required – no
    Bank and International need to go into great detail on
    Monetary Fund as sources of structural adjustment programmes
    finance especially in etc. Students could do own research
    developing economies on internet.

    © UCLES 2003 3

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