Sources of finance common mistakes

Common mistakes

• Finance sources and suitability common mistake 1

  Giving a vague answer instead of directly addressing: Explain internal and external sources of finance, including family and friends, retained profit, share issue, loans or mortgages, selling assets, overdrafts, trade credit, hire purchase and government grants..

  Fix itAnswer by clearly explaining how to explain internal and external sources of finance, including family and friends, retained profit, share issue, loans or mortgages, selling assets, overdrafts, trade credit, hire purchase and government grants..

• Do not turn assets, government grant, share issue, trade credit into a generic Sources of finance point

  A weak response about MetroMove defines assets, government grant, share issue, trade credit but gives no link to unit contribution, ?10,759, or the customers. It may also confuse revenue versus profit.

  Fix itStart with the business evidence, explain how Finance sources and suitability changes the decision, then judge whether the benefit outweighs the cost or risk for MetroMove. Separate revenue versus profit before writing the final recommendation.

• Finance sources and suitability common mistake 1

  Giving a vague answer instead of directly addressing: Analyse advantages and disadvantages of finance methods for a given situation..

  Fix itAnswer by clearly explaining how to analyse advantages and disadvantages of finance methods for a given situation..

• Do not turn disadvantages, methods, analyse, finance into a generic Sources of finance point

  A weak response about SwiftServe defines disadvantages, methods, analyse, finance but gives no link to labour productivity, ?8,244, or the operations manager. It may also confuse gross profit versus net profit.

  Fix itStart with the business evidence, explain how Finance sources and suitability changes the decision, then judge whether the benefit outweighs the cost or risk for SwiftServe. Separate gross profit versus net profit before writing the final recommendation.

• Finance sources and suitability common mistake 1

  Giving a vague answer instead of directly addressing: Evaluate suitable sources of finance for new and established businesses..

  Fix itAnswer by clearly explaining how to evaluate suitable sources of finance for new and established businesses..

• Do not turn sources of finance into a generic Sources of finance point

  A weak response about Harbour Hire defines sources of finance but gives no link to unit contribution, ?6,279, or the customers. It may also confuse revenue versus profit.

  Fix itStart with the business evidence, explain how Finance sources and suitability changes the decision, then judge whether the benefit outweighs the cost or risk for Harbour Hire. Separate revenue versus profit before writing the final recommendation.