3.1 INTRODUCTION TO FINANCE / IB BUSINESS MANAGEMENT / capital expenditure, revenue expenditure #Finance

hello my Golden Boys and Girls welcome to unit 3 Finance and accounts we’ll start off with a nice and small topic that is called role of

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance the main point of this class is to talk about two major ways how businesses can spend money there is only one part in this class where we’ll talk about expenditures and there is

only one assessment objective that I would like you to have a look at right now foreign Finance here first of all #1a73e8; text-decoration: none;">Finance is important for all stages of Business Development if you want to set up a company a startup what do you need Finance if you want to run the

business if you want to keep the business going what do you need Finance if you want to expand guess what you need correct color: #1a73e8; text-decoration: none;">Finance again Finance Finance

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance again Finance color: #1a73e8; text-decoration: none;">Finance one thing to keep in mind here is that Finance is not just one thing in the next CashNews.co class we are going to talk about different

sources of Finance and you will learn that what is appropriate for several types of business entities is not appropriate for the other types of business entities for example

for a sole Trader the most appropriate source of Finance might be personal Savings or some money that your family and friends Loan to you but for

multinational companies personal funds sounds ridiculous of course bank Loan or share Capital would be more appropriate more about that in the next CashNews.co class for now just keep in mind that different sources of

style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance are appropriate for different types of business entities if you forgot what type of business entity is then 1.2 is the class that I would like you to review so when we talk about role of

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance basically we talk about two major ways how businesses spend their money one way for businesses to spend money is to buy stuff that lasts for more than one year or if we use business

terminology to purchase fixed Assets fixed Assets are the ones that last for more than one year for example equipment land Building or anything else that is significant enough to last for more than a year if you want to know Capital expenditure for

your favorite company then you gotta look for capex Capital expenditure in the annual report of your favorite multinational company the section of annual report that you would like to pay particular attention to is Balance Sheet and Cash Flow

statement we’ll talk about these two statements later in unit 3. stay tuned so once again Capital expenditure is long-term expenditure on fixed Assets fixed Assets are things that last for more than a year another way for businesses to spend

money is Revenue expenditure Revenue expenditure is payment for the daily running of the business for example wages or electricity bills in other words Revenue expenditure is the same thing as operation expenses or Opex this is what we’re

gonna talk about later in unit 3 2 again if you want to find out the Opex or Revenue expenditure of your favorite company then check out annual report and go to Income statement or Profit and loss account this is the same thing just two different

names of one and the same thing by the way when I say your favorite company I mean multinational publicly held company for private limited companies it would not be that easy to acquire their Financial Statements so if we summarize Capital expenditure is spending

on fixed Assets that last for more than one year Revenue expenditure is spending on daily running of the business within one Financial year and what’s important is that money text-decoration: none;">Finance is limited so if most spending in an organization refers to Capital expenditure then it means that you are at risk of not having enough none;">Finance to sustain daily operations of the business if the organization is spending most of its Finance on Revenue expenditure it means that you are at risk of not

being able to sustain your growth because you are not able to purchase fixed Assets so what’s important here is that you should be balanced just like iplearner profile tells you right so balance among these expenditure balance in scarce

style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance is one thing that is really important that’s it this is the end of 3.1 in the next class we’re going to talk about different sources of #1a73e8; text-decoration: none;">Finance for now before you turn off this CashNews.co like And subscribe also make sure you have a look at assessment objective and make sure you can do the following foreign