IMPORTANCE OF FINANCIAL ASPECT IN BUSINESS PLANNING

Finance is the most important aspect of entrepreneurship, because a business

would not be established without funds. It helps business achieve their goals by
providing the funding they need to achieve them. Without funding, business cannot
be successful.

Arbitrage - Abstract digital information to represent Business Financial as concept.

The word Arbitrage is a part of stock market vocabulary in stock

Capital is the amount of cash and other assets owned by a business.

Can also represent the accumulated wealth of business, represented by its
assets less liabilities.
Can also mean stock or ownership in a company.
In general, capital is accumulated assets or ownership.

Cash Flow The movement of cash into or out of a business, project, or financial
product.
The (total) net cash flow of a company over a period (typical a quarter or a
full year) is equal to the change in cash over this period.
Positive if the cash balance increase (more cash becomes
available).
Negative if the cash balance decreases.
Debt Refers to borrowing, usually made to run a business or make new
investments.
 The borrower receives the amount required, usually a large capital sum
upfront, and agrees to repay the same with applicable interest in
installment.

Financial modeling is the task of building an abstract representation (a model)

of a real world financial situation.
This is a mathematical model designed to represent (a simplified version of)
the performance of a financial asset or portfolio of a business, project, or
any other investment.

Entrepreneurship is the process of starting a business or other organizations.

Develops a business model, acquires the human and other required
resources, and is fully responsible for its success or failure.

Funding Getting money to run the business or activity.

Usually this is money before the event takes place to put the event on.
Includes: Patrons, Investors, Bank loans, Sponsorships, Donors, and
Fundraisers.

Interest
Earning Interest When you save money in the bank or building society,
they will pay you so let them look after your money. This is called interest.
Example: if you save $100 in an account with an interests rates of 5% after a
year you will have $ 105.
Paying Interest If you borrow money, banks, or building societies will
charge you for this. The extra charge is also called interests.
Example: if you save $100 in an account with an interests rates of 15% after
a year you will owe them $ 115.

Investment involves making a sacrifice of in the present with the hope of

deriving future benefits.

Liquidity How quickly and easily an asset can be converted to cash.

Less Liquid Investments saving tools = More liquid