2.1

• What is retained profit?

  Reinvesting earnings back into the business
• How does selling assets generate cash for a business?

  By selling underutilized or non-essential assets
• What is the purpose of working capital management?

  Efficiently managing cash, inventory, and accounts receivable
• What is share capital?

  Funds raised by issuing shares
• What are ordinary shares characterized by?

  Voting rights and variable dividends
• What distinguishes preference shares from ordinary shares?

  Preference shares have fixed dividends and no voting rights
• What is a bank loan?

  Long-term borrowing with fixed repayment terms
• What is an overdraft?

  A short-term borrowing facility
• What are debentures?

  Long-term loans with fixed interest payments
• How does crowdfunding work?

  Raising small amounts from many people online
• What is venture capital?

  Investment in high-potential startups or growing businesses
• What is limited liability?

  Owners' personal assets are protected
• What is unlimited liability?

  Owners are personally responsible for all business debts
• How does limited liability affect attracting investment?

  Limited liability companies find it easier to attract investment
• What challenges do unlimited liability businesses face in securing finance?

  They may face challenges in securing external finance
• What are the components of a business plan?

  • Executive summary
  • Company description
  • Market analysis
  • Organization and management
  • Product or service line
  • Marketing and sales strategy
  • Financial projections
• What is the purpose of cash flow forecasts?

  Predicting future cash inflows and outflows
• How do cash flow forecasts inform financial decision-making?

  By identifying potential cash shortages or surpluses