Table of contents:

3.1 What is finance

the financial resources used by business organizations to cover their financial needs → without money, businesses cannot operate

What are the main uses of finance?

<aside> 💡 There are 2 main ways in which financial resources can be used:

1. capital expenditure
2. revenue expenditure

</aside>

1) Capital expenditure

the money used to buy fixed assets

• in this context, fixed assets refer to durable, physical assets that belong to a business → these assets are used to generate future revenues
• e.g. buildings, factories, and machines

2) Revenue expenditure