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Virgin and Sources of Finance


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									                                                          Virgin and Sources of Finance

Source of Finance         When used or could        Definition                   Advantages              Disadvantages
                          be used
Retained Profit
Selling Shares
Sale of Assets
Bank overdraft
Bank loan

Further questions:
   1. Explain the difference between internal and external sources of finance?
   2. Explain two reasons why Branson’s mother might have re-mortgaged in order to support his business in the early days.
   3. Explain three things that a bank would want to see before considering lending money to Virgin when the business was
      starting up.
   4. Explain two risks that Virgin Group would face if borrowing money from a bank.
   5. Explain two reasons why Virgin might have floated shares on the stock exchange in 1986 rather than obtaining finance from
      other sources.
   6. Explain two reasons why the Virgin Group might sell assets.
   7. If Virgin Group was to run a fleet of company cars for its managers, why might it use hire purchase rather than buying the
      cars outright?

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