• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Finance for business

Extracts from this document...


UNIT 4: FINANCE FOR BUSINESS Task: 1 Financial institutions and their role within the UK Economy High Street Banks These organisations can be seen on the most high streets. Their purpose is to supply a financial service to both the public and business organisations. Banks are public limited companies with their shares quoted on the stock exchange. Their aim is to make profit which will be distributed to their shareholders. Banks play a very important role in our lives. Banks help us in buying houses and the nice, expensive cars we drive, without banks it would be very difficult to buy and live in expensive houses. Banks provide financial services to people and businesses. For example if we think about starting up a business, we will need banks financial support if we haven't got the full amount of money. They provide services for the convenient and safe flow of money in the economy. Their role in the economy today is to provide customers with full range of products and services which include: current accounts, deposit accounts, standing orders and direct debits, overdrafts, insurance, loans, mortgages, debits and credits cards and much more. We use these banks facilities in our daily lives, for example to withdraw money when needed or to deposit money to save money in the bank. ...read more.


People are having problems because they now have less to spend and there is a rise in interest rates, so for instance if they borrow money, they will have to pay a lot more back. Just imagine if there were no banks our economy will collapse, new businesses will be less likely to survive and start up, and people will have difficulties in buying homes and cars. This also could cause loss of employment opportunities and a reduction in amount of products and services available for people to buy. Therefore we cannot survive without banks, we rely on banks to provide us with financial support, banks also support business, so that they can survive in the economy by providing them with loans and help them grow and succeed. Banks enable us to store money safely and we also earn interest on our saved amount of money which is beneficial in a lot of ways. Because of banks we have a safe future, we are able to get a credit from bank to buy houses, car and use overdraft facilities, which can again help us a lot in our daily lives, and we can take money out of the bank in an emergency without worrying about having money in our bank accounts. ...read more.


As a primary market, the Stock Exchange will liaise with investment banks and businesses that are looking to raise capital by selling shares. This process involves the business being 'listed' on the Stock Exchange or 'floating'. In this case, the business will effectively get its capital through the initial sale of its shares. Much of the Stock Exchange's work, however, is as a secondary market. People buying shares may wish to do so for a variety of reasons - to secure dividends or to see the price of the shares rise, for example. If people wish to sell shares then it would be very inconvenient for the business itself to take the shares back and then sell them on to someone else. Such a process would be extremely disruptive and not help planning. The Stock Exchange, therefore, acts as a market that puts those wanting to sell shares in touch with those seeking to buy - effectively the Stock Exchange is a market for second hand shares! To facilitate this process the market has Two main 'players' . The modern Stock Exchange operates through computer based trading. Both stockbrokers and market makers need access to high quality information and ICT facilities make this much easier. The Impact of Stock Exchange on UK European Central Bank - =The European Investment Bank is the largest financial institution in the world. It gives loans for regional development particularly in the less developed areas of Europe. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Accounting & Financial Management section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Accounting & Financial Management essays

  1. A2 Business CourseWork

    Tesco do have other aims regarding environmental issues including reducing the levels of CO2 emissions from their distribution and transportation. It means that they should cut down on their total carbon footprint making them look better in the public eye.

  2. Sources Of Finance

    A bank loan can help in many ways as it is usually a large sum of money that is borrowed over a longer period of time, it can be used for buying premises which can be very expensive, to the stores features and equipment.

  1. Edexcel Applied Business A2 unit 11 finance task A

    would be a suitable source of finance for Thomas Cook Group plc. They can use the shareholders investment for a source of finance and invest it into their business. Shareholders usually account for a large amount of money therefore it would be suitable for Thomas Cook Group plc if they

  2. Edecel Applied Business Unit 11 Finance Task B

    The start of Thomas Cook's cycle would begin with them securing the hotel room and flights needed for their future customers, these would be on credit. They then sell these to the customers and take deposits/receivables. Thomas Cook need to ensure they get the correct balance between the hotels and flights they book and the correct amount of customers.

  1. Edexcel Applied Business Unit 11 Finance Task C

    The calculation below shows the months it will take within the year to pay it back. 50,200 / 12 = 4183.3333 25800 / 4183.3333 = 6.167 Payback is 4th year 3yrs and Net flow No. of months How much money is needed 6.1 months This means that to earn the

  2. The company I'm reporting on is Kraft Foods Incorporated - accounting principles.

    This yields a cash debt coverage ratio of .095:1. This means for every dollar of liability the Company has about 10 cents to show for it. In 2000, the Company's net cash from operating activities was $3.254 billion and average total liabilities were 27.449 billion. This yields a cash debt coverage ratio of .12:1.

  1. Sources of finance for a new business.

    Another alternative is that your investors might want to be part of the enterprise. This could add to an entrepreneur's benefit by having someone to consult and share the risks with. But is could also slow the process of the enterprise if there is any disagreement over major decisions.

  2. Roles of Banks and Building societies.

    Their main aim is to focus on specialising for businesses. They handle and are accounted for the global finance, lasting loans, to firms and financing. Merchant banks do not provide regular banking services to the general public. Merchant banks would invest money into any new suitable business that might be

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work