Financial Management: Institutions and Funding Sources

Banks are deposit-taking institutions that provide short-term financing, while finance companies provide long-term financing for specific purposes, such as consumer or business financing. Both play a crucial role in facilitating financial transactions and providing credit to individuals and businesses.

Retained profits are a source of internal funding that can be used to finance business operations, investments, or expansion. However, relying solely on retained profits can limit a company's growth potential, as it may not be able to generate sufficient funds to meet its needs.

Debentures are debt instruments that represent a loan from investors to the company, while share capital represents ownership in the company. Debentures increase a company's debt and fixed interest expenses, while share capital increases its equity and ownership dilution. Both impact a company's financial structure and risk profile.

<p>Global strategic alliances provide access to new markets, technologies, and resources, enabling companies to improve efficiency, reduce costs, and increase competitiveness. They also facilitate knowledge sharing, risk management, and innovation, contributing to a company's long-term sustainability.</p> Signup and view all the answers

<p>Venture capital is a high-risk, high-reward investment in a company's equity, typically in exchange for ownership and governance influence. Secured loans, on the other hand, are debt instruments that require collateral and carry fixed interest expenses. Venture capital can provide valuable strategic guidance and networking opportunities, while secured loans can provide quick access to capital, but both impact a company's financial structure and growth prospects.</p> Signup and view all the answers