๐ญ Think of a business like a car. It needs fuel to start, run, and also some savings to get repairs or upgrades in the future.
Finance can play two big roles
Definition: Money spent on items lasting for more than a year. It's like the big stuff you don't buy every day.
Examples
Purpose: These are for the long-haul! They help a business generate income over many years.
Cool Fact: Businesses can use CapEx items as collateral (kinda like when you promise to give your video game to your friend if you don't return their book). For example, a bank might give a loan because a business offers its building as security.
๐ก Real-world example: A pizza delivery service buying a new delivery van. They'll use it for years to deliver yummy pizzas to homes! ๐
Definition: The day-to-day spending needed to keep the business running. Think of it like buying groceries for your home.
Examples
Purpose: Unlike CapEx, RevEx doesn't look at the long-term. It's more about keeping the lights on today!
๐ก Real-world example: A school spending its funds on teacher salaries and cafeteria food. But hey, if they keep spending and never save, they won't have enough to build a new sports hall or fancy computer lab!
Dive deeper and gain exclusive access to premium files of Business Management SL. Subscribe now and get closer to that 45 ๐
๐ญ Think of a business like a car. It needs fuel to start, run, and also some savings to get repairs or upgrades in the future.
Finance can play two big roles
Definition: Money spent on items lasting for more than a year. It's like the big stuff you don't buy every day.
Examples
Purpose: These are for the long-haul! They help a business generate income over many years.
Cool Fact: Businesses can use CapEx items as collateral (kinda like when you promise to give your video game to your friend if you don't return their book). For example, a bank might give a loan because a business offers its building as security.
๐ก Real-world example: A pizza delivery service buying a new delivery van. They'll use it for years to deliver yummy pizzas to homes! ๐
Definition: The day-to-day spending needed to keep the business running. Think of it like buying groceries for your home.
Examples
Purpose: Unlike CapEx, RevEx doesn't look at the long-term. It's more about keeping the lights on today!
๐ก Real-world example: A school spending its funds on teacher salaries and cafeteria food. But hey, if they keep spending and never save, they won't have enough to build a new sports hall or fancy computer lab!
Dive deeper and gain exclusive access to premium files of Business Management SL. Subscribe now and get closer to that 45 ๐