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Sources of Business Finance

ICSE · Class 12 · Business Studies

Complete topic list for Sources of Business Finance in ICSE Class 12 Business Studies. Key concepts, sub-topics, and what to focus on for board exams.

70 questions35 flashcards5 concepts

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4 Topics · ICSE Class 12 Business Studies

Topics in Sources of Business Finance

1

1. Classification of Sources of Business Finance

  • Sources of business finance are broadly divided into owned funds and borrowed funds.
  • Owned funds include equity shares, preference shares, retained profits, global depository receipts, angel investors, venture capitalists, crowd funding, and peer-to-peer funding.
  • Borrowed funds include debentures and bonds, loans, public deposits, bills discounting, and trade credit.
2

2. Equity Shares and Preference Shares

  • Equity shares are ordinary shares with no preferential rights in dividend payment or repayment of capital.
  • Equity shares are issued before any other type of shares.
  • Dividend on equity shares is paid after preference share dividend and is not fixed.
3

3. Debentures and Bonds

  • A debenture is a document or certificate issued by a company under its seal as an acknowledgement of debt.
  • Debentures and bonds represent borrowed funds.
  • Interest on debentures is paid at a fixed rate and is payable every year even when the company suffers loss.
4

4. Retained Profits

  • Retained earnings or ploughing back of profits means retaining part of net profit year after year and reinvesting it in the business.
  • Retained profits are also called self financing.
  • This is an internal method of finance.

Key Concepts

Central concept: Sources of Business Finance

Owned fundsBorrowed fundsShort-term financeLong-term financeHybrid securityCapital market instrumentsAlternative financing

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.

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All 22 chapters — ICSE Class 12 Business Studies Syllabus

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