...(McLaney and Atrill: 2010) suggest that finance is concerned with the way in which funds for a business are raised and invested. Any business irrespective of its size and nature requires sources to raise finance. Different types of sources of finance are available to different types of businesses. Broadly the two types of sources of finance are internal and external. Internal sources are from within the business and external sources are outsourced extrinsically. The three main legal statuses of business constitute of being a sole trader or partnerships and Private Limited Company. Sources of finance available to each of these are discussed below. Sole Trader and Partnership: Sole traders and partnerships refer to the simplest forms of business organization. A sole trader is an individual who runs a business from his own name, providing all the capital and assuming all the risks. A partnership can include more than one individual. Sole trader and partnerships have a range of options to get finance. Personal Savings and Loans * Put simply, personal savings is the amount of money a person has at his disposal. It becomes a source of finance when the sole trader or a partnership member is willing to invest it in his business. It is up for the individual to decide whether he wants to keep his savings or use them to buy equipment, vehicles, tools or other things his business's needs. Loans from friends and family also amount to a source of finance. Working Capital * Working...
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...Finance is important to a business, without it, an organisation would not be able to run effectively, eventually leading the organisation to fail. The are many reasons why Finance is important to an organisation and many factors in can be used for, i.e. investing and purchasing fixed assets like land and building, necessary equipment and expanding the business. Organisations that have a solid finance available to their business are able implement changes that want, which could help to bring in more money to the organisation and allowing them to last and survive. There are two types of finances, external sources or internal sources. Sources of Finance: External sources of finance are available sources of income that have come from outside the organisation. Examples of external finance are: An overdraft from the bank. A loan from a bank or building society. The sale of new shares through a share issue.. Within external sources of finance, there are two options available to the organisation, short term & long term. Long-term finance means the business will pay back the loan taken out, over a longer period of time usually one year and over. The two main sources for long term are share capital & loan capital. In contrast to Long term, Short-term finance will be paid back in a short period of time,. This is divided into bank overdraft, hire purchase, trade credit, leasing, etc. Long term sources: Shares, Debentures, Public Deposits, Retained earnings...
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...services any time. Many business experience cash flow problems, meaning that they do not have enough cash to do what they want to do. Cash flow means "the flow of money in and out of a business". These are ways cash flow can occur: Cash inflows: * Sale of goods for cash. * Payment from debtors. * Borrowing from a source (but will inevitably lead to cash outflow in the future). * Sale of unwanted assets. * Investment from investors: shareholders and owners Cash outflows: * Purchasing goods for cash. * Payment of wages, salaries and others in cash. * Purchasing fixed assets. * Repaying loans. * Repaying creditors. Cash flow cycle A cash flow cycle explains the stages that are involved in the process of cash out and finally into the business. This is what happens: The longer it takes for cash to get back to the business, the more they will needworking capital to pay off their short-term debts. This cycle also helps us understand the importance of cash flow planning. This is what happens when a company is short on cash: * Not enough to pay for materials, therefore sales will fall. * The company will want to insist customers on paying in cash, but they might lose them to competitors who let them pay in credit. * There could be a liquidity crisis when it does not have enough cash to pay for overheads (bills, rent, etc.) and the business might be forced to close down by its creditors. Managers need to plan their cash flow so...
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...INTRODUCTION As we are aware, finance is the lifeblood of business or it can be said as the most important part of all the business enterprises. To understand finance, you need to know the entire business indeed. Finance can be used for various reasons like expanding the business, investing and purchasing fixed assets like land and building, machinery so on. In order to survive in this competitive world every organisation need to have a good strength of finance available to their business or else they won't be able to survive in this world. Hence, it is very important to select the correct sources of finance available to the company. Finance can be in two types' external sources or internal sources. TASK ONE 1. SOURCES OF FINANCE AVAILABLE TO A BUSINESS Finance can be arranged from internal sources or external sources. External sources of finance are funds that come from outside the business. Here the business are getting loans from individuals or institutions that do have business relations directly e.g. banks. 1.1 Internal sources The main internal sources of finance for a start-up are as follows: Personal sources These are the most important sources of finance for a start-up, and we deal with them in more detail in a later section. As mentioned earlier, most start-ups make use of the personal financial arrangements of the founder. This can be personal savings or other cash balances that have been accumulated. It can be personal debt facilities which are...
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...INTRODUCTION Accounting and finance are closely related because it deals with the financial aspects of a company. Finance and accounting are closely related to the because accounting is a factor that places contribution to financial decisions. Accounting gives data to allow the finance department to make knowledgeable decision to maximize profits for the company. Accounting generates information/data relating to operations and activities of the firm.() Accounting supplies valuable information such as balance sheets, and income statements. These statements provide a picture for the finance department assess the company’s past performance guide the directions of the firm. It also will inform the finance department what expenses need to be meet. Finance is defined as the art and science of managing money.() It consist of different areas that provide financial services and financial management for corporations. Finance takes information that it collects from accountants then creates a proposal to establishing a plan that will help maximize profits. Finance are responsible for financial planning, prognosis investment, recognize and understand how monetary affects the cost and the availability of funds. Accounting Accounting is traditionally defined as the bookkeeping for a business.() It collects data and organizes business’s financial data. The accounts use balance sheets, manage account receivables, payables, collections, contracts and invoices, etc()...
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... financial management is the process of setting objectives throughout the business and deciding what resources are needed to achieve these objectives. The ‘finance’ part comes through the specific decisions as to how the resources will be financed. Financial management has a strategic role because it takes place in a changing environment and plans need to be flexible and ready to change. Strategic financial planning sets out the broad series of steps that need to be taken to achieve the business’ strategic objectives. Examples of changing business environments: o Taxation and other laws o Technology o Economy o Financial Innovations Within this changing environment the foals of the business need to be reached. o Liquidity o Solvency o Profitability o Growth o Efficiency Objectives of Financial Management Liquidity • A business is liquid when it can pay its debts as they fall due. ...
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...Corporate Finance The role of the corporate finance team is to manage a companies money, and maximizing the companies value while minimizing the risk states Wetfeet website (n.a., 2012). A corporate finance department may have a treasurer, a controller or comptroller, risk manager, and internal auditors with assistants and analysts all working under the chief financial manager (Ring, 2004). Corporate finance positions can be found in all companies from small to large (Kochanek, 2008). Entry-level positions are usually in investing, cash management, payroll, accounts receivables, accounts payables, bookkeeping clerks and other paper processing (Ring, 2004; Wiley, 2015). One job commonly found in corporate finance is that of a financial analyst. According to monster.com, common duties of an entry level financial analyst may include; analyzing financial data, recommending specific investments, evaluating and assessing both current data and historical information, studying financial trends on a consistent basis, ducting regular evaluations of financial statements, preparing complex financial reports, meeting privately with investors, and explaining recommendations in details to companies and individuals. The website Wetfeet (n.a.,2012) says, financial analysts pore over spreadsheets that detail cash flow, profitability, and expenses. They look for ways to free up capital, increase profitability, and decrease expenses. If any department...
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...Directors [Team’s chosen name for the corporation – TBD in Unit 10] By Terra Allen, Accounting/Finance Manager, Michael Argentino, Marketing/Sales Manager, George Dickson, Operations/Production Manager, Doris Toliver, HR Assistant Manager, Felicia Parris, IT Assistant Manager March 14, 2014 Introduction to the Proposal’s Purpose and Content [Team’s chosen name] Corporation is a medium-sized manufacturing company with 250 employees. It directly markets one product: a unique coffee cup with a patented ball bearing sliding mechanism. Nathan Jr. and a group of 10 other executives run the company. [Team’s chosen name] Corporation has received a large sum of money from a venture capitalist. The venture capitalist and Nathan Jr. are predicting 100 percent growth in five years. To achieve that growth, productivity will need to increase at a similar rate. Therefore, this proposal provides a suggested business model update. Further, the functional areas updates are indicated to assist the business model to predict, plan, and implement future growth and profits. In this proposal, the problem of the outdated business model and functional areas is addressed with new ideas and new employees to implement them. The 100 percent growth projection in five years can become a reality with the managers’ ideas about these questions: 1. What will my updated business model look like? 1. How can my functional area managers modify their activities and objectives to help...
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...Jella Mae Macalima November 24, 2014 BSTM-2B Ms.Ana Esquierdo “9 RULES OF FREEDOM OF THE AIR” The freedoms of the air are a set of commercial aviation rights granting a country's airlines the privilege to enter and land in another country's airspace, formulated as a result of disagreements over the extent of aviation liberalisation in the Convention on International Civil Aviation of 1944, known as the Chicago Convention. The United States had called for a standardized set of separate air rights to be negotiated between states, but most other countries were concerned that the size of the U.S. airlines would dominate air travel if there were not strict rules. The freedoms of the air are the fundamental building blocks of the international commercial aviation route network. The use of the terms "freedom" and "right" confer entitlement to operate international air services only within the scope of the multilateral and bilateral treaties (air services agreements) that allow them. The first two freedoms concern the passage of commercial aircraft through foreign airspace and airports, the other freedoms are about carrying people, mail and cargo internationally. The first through fifth freedoms are officially enumerated by international treaties, especially...
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...(HND) in Business Unit Title and Number: Managing Financial Resources and Decisions (Unit 2) QFC Level: 4 Credit Value: 15 Credits Module Tutor: Yannick Fansi Student’s Name: Adeyinka Adedoyin Email: princessadeyinkaadedoyin@yahoo.com Student’s ID: 21834 Task 1: 1.1 Identify the Alternative Sources of finance that could be available to the business. (1.1, 1.2) Introduction In writing this assignment report, I will attempt to look into the different sources of finance that business can access or that available for starting a new business and I will also find out the implications of sources of finance and how it impacts on the business. It is often difficult to start a business without enough capital or cash, as all businesses require some form of finance throughout the life span of the business and for the operational cost of the day to day running of the business. Therefore without finance or raising enough capital the business can never materialised. It can therefore be argued that Finance is the life wire of a business as it plays a major role in starting a business. Finance can be used for various business projects including purchase of machinery, starting up a restaurant or for expanding existing business. When considering starting a business before raising the finance certain factors such as the size of the business, location of the business, the type of business and the target market as well as how profitable the business will be,...
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...Journal of Case Research in Business and Economics Application of Six-Sigma in finance: a case study A. Ansari Seattle University Diane Lockwood Seattle University Emil Thies Zayed University Batoul Modarress Zayed University Jessie Nino Seattle University ABSTRACT In recent years, companies have begun using Six Sigma Methodology to reduce errors, excessive cycle times, inefficient processes, and cost overruns related to financial reporting systems. This paper presents a case study to illustrate the application of Six Sigma Methodology within a finance department. Specifically, the case relates to the Continuing Account Reconciliation Enhancement project undertaken by the finance department of a major U.S. defense contractor. The goal of the project was to streamline and standardize the establishment and maintenance of costing and planning for all business activities within the current financial management process. The Six Sigma implementation resulted in a significant reduction in the average cycle time and cost, per unit of activity, needed to produce the required financial reports. Key Words: Six Sigma, Process Management, Quality Management, Finance Application of Six-Sigma, Page 1 Journal of Case Research in Business and Economics INTRODUCTION In 1987, Motorola developed and organized the Six Sigma process improvement Methodology to achieve “world-class” performance, quality, and total customer satisfaction. Since that time, at least 25% of the Fortune 200, including...
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...Managing Director has mentioned that the company is seeking to raise finance for a substantial capital investment opportunity that has arisen recently. You are required to outline your understanding of the budget process and also make some suggestions as to how the company would attempt to raise finance for the proposed investment. (60 Marks) Evaluate the need for companies to maintain an adequate cash-flow and discuss how you would attempt to measure one company’s performance against another with the use of ratios. (20 Marks) Discuss briefly, in your opinion, what the main causes of the current economic problems in Ireland are, and what steps should be taken to improve the economy. (20 Marks) Diploma in Logistics and Supply Chain Management Module 1: Financial Management Gary Doyle, Student Member, CILT 3 Budgeting Budgeting is one of the most important tasks undertaken in any organisation, whether it is a public or private company, a not-for-profit organisation, or any other group which must control amounts of cash or funds. Budgeting is an integral part of the overall direction in which a business is going. Any company, be it a start-up operation, or a long-established business; will implement a business plan to guide the course of their actions. Business plans generally involve: Identifying Objectives Searching for Possible Courses of Action Selecting a Course of Action Implementation of Long-Term Plans. A companies objectives might be: to make a clear...
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...BTEC Level 5 HND Business and Management | Assignment Name: | Managing Financial Resources and Decisions | Section 1: Understanding the Source of Finance Available to Business IDENTIFY THE SOURCES OF FINANCE AVAILABLE TO BUSINESS In order to set up a business the owner or business needs money to get it going, and in cases of established businesses, keep it growing. Business owners will usually use some of their own money coupled with other sources of finance to start their business. There are several ways to acquire financing and a few of them are personal capital and borrowing from friends, borrowing from a bank, factoring, invoice discounting, leasing, hire purchase and franchising. For larger companies they have the advantage of being able to sell shares to raise capital, they can also have large investors, and being able to ‘raise capital’, they can also retain earnings in order to use the money as cash flow for further developments in the company or for a particular project (this money belongs to shareholders). Companies who are already established can retain their profits for a period of time and use this money in the future for projects or business needs, this is usually shareholder dividend and ultimately belongs to the shareholders, but the company is using it to expand or better the business. The selling of company assets is also seen as a way of raising capital, however if you are selling off your assets how does this help your business, you will lose the...
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...These three financing options provide companies with needed resources when looking to finance business opportunities or restructure debt, the company must decide which options if not all are right for their business and restructuring of debt. Bonds, Notes, and Capital Leases Bonds are certificates issued to companies who promise to pay back borrowed money with a fixed interest rate at a certain time or maturity date. The borrower pays the interest or coupon on the bond either annually, semi- annually, or monthly. Bonds that mature in less than a year is called a boll, bonds that mature between one and Ten years are called notes, under writers provide the bond financing and then sell the bonds off to investors for profit on the open market. There are different types of bonds like callable bonds that allow the borrower to pay the bond off before maturity to limit interest paid on the bond. Putable bonds allow the bond holder to demand payment on the principle at an earlier date than specified avoiding coupon payments in the future. Convertible bonds are used by publically traded companies, this allows the principle to be “paid in shares of the company instead of cash” (Money, 2011). Corporate paper are short –term bonds issued to finance business operations. Bonds are used for financing activities for the borrower and investments for the investor. Terms of a bond will depend on the borrower’s credit worthiness; companies that are higher risk pay higher yields...
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...Lanka. The Company is also one of the largest listed companies on the Colombo Stock Exchange in terms of market capitalization and is Sri Lanka’s largest Foreign Direct Investor (FDI). Dialog has three reporting segments namely mobile operations, fixed broadband operations and television operations. However the actual operations differ from the above and are segmented into three tiers namely Customer facing units, Business units and Service units. The later segmentation is used in the strategic and financial planning process. Customer facing unit Business units Service Units Enterprise customers Individual customers Corporate Finance Corporate Planning HR Technical Support Operations Dialog TV Dialog Broadband E-Commerce Dialog Mobile Network Infrastructure G-Box Strategic planning process Axiata, the parent company of Dialog, sets macro financial targets for each of its subsidiaries taking into account the Axiata’s vision and objectives, economic factors of the respective countries (i.e. GDP growth, inflation, interest rates), mobile penetration, broadband penetration, government policies and initiatives of competitors etc. Dialog which is one of the subsidiaries of Axiata sets their strategic and financial plans according to those objectives. Dialog usually sets two types of strategic plans. 1. Long Range Strategic Plans for seven...
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