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Chapter Summary

Sources of Business Finance

ICSE · Class 12 · Business Studies

Summary of Sources of Business Finance for ICSE Class 12 Business Studies. Key concepts, important points, and chapter overview.

70 questions35 flashcards5 concepts

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Overview

Business finance is needed to start, run, and expand a business. Firms raise funds from owned sources and borrowed sources. Owned funds include equity shares, preference shares, retained profits, global depository receipts, angel investors, venture capitalists, crowd funding, and peer-to-peer fundin

Key Concepts

Equity shares are ordinary shares

Equity shares are ordinary shares that carry no preferential rights in dividend payment or capital repayment. They are issued before any other type of

Preference shares carry preferential rights

Preference shares carry preferential rights in dividend payment and repayment of capital. Dividend is fixed and paid before equity dividends, but only

A debenture is a document under

A debenture is a document under the company seal acknowledging debt and promising repayment with interest at a fixed rate. Debenture interest is payab

Retained profits

Retained profits, also called ploughing back of profits or self financing, mean retaining part of net profit year after year and reinvesting it in the

Loans are obtained from financial institutions

Loans are obtained from financial institutions and commercial banks. IFCI, SFCs, and SIDBI provide mainly long-term loans, while SBI, BOB, and PNB usu

Learning Objectives

  • Identify the main sources of business finance.
  • Distinguish between owned funds, borrowed funds, and hybrid security.
  • Understand the features of equity shares, preference shares, and debentures.
  • Explain internal finance through retained profits.
  • Describe term loans, public deposits, trade credit, and bill discounting.

Frequently Asked Questions

What are the important topics in Sources of Business Finance for ICSE Class 12 Business Studies?
Sources of Business Finance covers several key topics that are frequently asked in ICSE Class 12 board exams. Focus on the core concepts listed on this page and practise related questions to build confidence.
How to score full marks in Sources of Business Finance — ICSE Class 12 Business Studies?
Understand the core concepts first, then work through the 70 practice questions available for this chapter. Revise formulas and definitions regularly, and use flashcards for quick recall before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

More resources for Sources of Business Finance

All 22 chapters — ICSE Class 12 Business Studies Chapter Summary

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