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

Managing Financial Decisions Case Study - sources of finance

Extracts from this document...

Introduction

´╗┐Managing Financial Resources and Decisions Name: Gulya Aslanova Subject: Raising Funds; Recommendations Tutor: Rolland Date Submitted: 1st October 2012 Raising Funds Summary Jacinda has faced the problem of acquisition of motorcycles and bicycles for her business. She would like to get an advice on the appropriate way of financing the purchase of two motorbikes and two bicycles. What source of finance are most appropriate for her needs and why? I conducted the following research, and the results are given below, along with my recommendations. Background Jacinda owns a sandwich bar that also delivers snacks to local offices and shops. The business has been successful and because of excellent service offered as well as the good quality of food, there has been an increased demand for the delivery service. Jacinda would like to increase the number of motorbikes and bicycles used to deliver the food to the offices in the city centre. Main Body As you can see from reading above, Jacinda need advice how to do it in this situation. ...read more.

Middle

15 days later the credit card statement is sent in the post and the balance is paid by the business within the credit-free period. The effect is that the business gets access to a free credit period of around 30-45 days! Now I would like to inform Jacinda about External Sources of Finance. The 1st option for the External Sources of Finance could be - A bank loan which provides a longer-term kind of finance, with the bank stating the fixed period over which the loan is provided (e.g. 5 years), the rate of interest and the timing and amount of repayments. Bank loans are good for financing investment in fixed assets and are generally at a lower rate of interest that a bank overdraft. However, they don?t provide much flexibility. The 2nd one Jacinda can use her External Sources of Finance is - Bank Overdraft. It is a more short-term kind of finance. ...read more.

Conclusion

So Yacinda can purchase for motorcycles and bicycles partly from her Personal/Self Sources plus using one of her bank facilities ? Overdraft or Loan. For the 5th External Sources of Finance option Yacinda can use Credit from Suppliers. Many invoices have payment terms of 30 days or longer. A company can take the maximum amount of time to pay and use the money in the interim period to finance other things. This method should be treated with caution to ensure that the invoice is still paid on time or else the firm might risk upsetting the supplier and jeopardise the future working relationship and terms of business. You can also call this as a careful balancing act of cash-flow. Conclusion Summarize the fact that whether I were Jacinda, I would use both ? Internal and External option of Finance for my own business. In a conclusion it would be desirable to add that conducting researches I provided to Yasinda every possible ways of financing of her purchases. So she can choose more appropriate way of finance from all mentioned above sources for her business. ...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. Advantages and Disadvantages of the various sources of finance available to businesses.

    Finance company retains legal ownership of the equipment until the end of the agreement. This normally gives the finance company better security than lenders of other types of loan or overdraft facilities and therefore may be able to offer better terms.

  2. Sources Of Finance

    These are obtained from banks on a current account and have a lower interest rate than a long-term loan. Private limited companies are owned by a number of individuals who have shares in the business and all have the same responsibility and rights as each other.

  1. A2 Business CourseWork

    Tesco not only give the consumers the opportunity to see the impact they are having but they themselves can also analyse the sales of the products to see if that, if consumers know, if they will go for the lower carbon footprint products or not.

  2. Edexcel Applied Business A2 unit 11 finance task A

    This means they have the right to receive an original value of 200million from shares. Therefore Thomas Cook can issue further shares and this could be used as a future source of finance for the company. However they have to consider whether shares are needed as the more shares there are in the business the lower the value is.

  1. Birmingham Bullring- Website Case Study

    touch screens as well as plasma screens, this give the people, customers and tourists the opportunity to plan their route to the Bullring and can also plan their route home, this gives them a convenient and enjoyable shopping experience. This is a link from the Bullring website this provides information

  2. DIvidend Policies and Financing

    The dividend policy has to be modified or formulated accordingly in those enterprises. Need for Funds Dividends paid to stockholders use funds that the firm could otherwise invest. Therefore, a company running short of cash or with ample capital investment opportunities may decide to pay little of no dividends.

  1. Describe sources of internal and external finance for a business

    However, you will need to pay back the loan and this will come with high levels of interest. There are different types of loans, secure and unsecure. A secure loan is when the loan goes against the owner?s assets. For example, the loan could go against their building.

  2. Justify a proposed comprehensive and integrated nancial service package that is appropriate for the ...

    Once he has enough disposable income the products I would suggest would be shares or unit trusts. The other customer that I will be advising is David Vaz. Davis is educated to A level and owns and runs a plumbing business and employs one person full time and another on a part time basis.

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