What does the term Financed By refer to in a business context?

In a business context, the term "Financed By" refers to the sources of funds that have been invested in the business, which includes capital from investors, loans obtained from financial institutions, and funds raised through the issuance of shares. This terminology is essential for understanding a business's financial structure and indicates how a company finances its operations and growth.

When evaluating the capital structure of a business, it becomes important to identify where the funding is coming from, as this impacts the company's risk profile, financial stability, and future financing options. Knowing the distinctions between equity (money invested by owners or shareholders) and debt (money borrowed that needs to be repaid) is crucial for stakeholders, as it affects decisions related to dividends, reinvestment, and overall financial health.

The other options do not align with the definition of "Financed By." The total revenue generated reflects the income the business earns and is not a source of funding. Expenses incurred refer to the costs associated with running the business and do not represent funding sources. The amount of credit extended may relate to a business's ability to borrow but does not encompass the broader aspect of financing that includes both equity and debt investments.