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

Sources of Finance

Extracts from this document...


Sources of Finance Task A Introduction Thomas Cook plc is a German owned company, who merged with MyTravel Group in June 2007. Every year, over 19 million people selected to travel with Thomas Cook plc from one of their 3,000 stores for making a holiday destination decision. The company employs over 33,000 people, with 97 aircrafts in operation. Being a plc, Thomas Cook must ensure that they are registered with the companies' house, and their shareholders attend to at least one meeting annually. Thomas Cook plc was introduced within the travel market in 1841, which began as a train company, and now has grown into a comprehensive travel business. It is now one of the top 4 travel companies, with the help of merging with 'My Travel'. Thomas Cook plc operates within a very competitive travel market due to the amount of consumers booking holidays increasing. ...read more.


Thomas Cook plc's packages are seasonally related, such as towards the summer the hotels will be located towards the beach, and during the winter season, hotels will be more closely to ski resort attractions. However, Thomas Cook plc's main competitor, Thomson (TUI) also provides their customers with luxurious and different holiday range packages, such as 18:30 club which attracts a large response from their customers. Why do businesses need finance? All businesses need finance to operate their daily activities. There are two main reasons for why all businesses need finance. One is for revenue expenditure, which are short term and help to keep the business functioning from day to day, such as paying the bills and staffs wages. The second is capital expenditure which is spending on those items which will help generate profits over the longer term, such as spending on fixed assets, and help with improvements to the business in ways such as the expansion of the premises, and research and development costs. ...read more.


When given a loan, Thomas Cook plc are guaranteed the finance, however loans come along with strict terms and conditions, such as the time they have to be paid back, which is usually at the end of each month, in instalments. Loans are usually tied in with assets of Thomas Cook plc's, such as their premises, or their aircrafts, which would mean these are at risk if any repayments are missed. The balance sheet in Source 1 illustrates that �4,126.8 million is spent towards intangible assets such as hotel. This large sum of finance borrowed for the assets was most likely to be through a long term loan, in which Thomas Cook would have a larger term to repay the debt they owe to the bank. A loan is appropriate for Thomas Cook plc as it offers them a larger amount of period to balance out the cashflow, and provide them with opportunities in order to come across techniques for speeding up cashflow coming into the 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.

    Potential investors will seek background information on you and your business - they will closely scrutinise past results and forecasts and will probe the management team. The funding is committed to your business and your intended projects. Depending on the investor, the business may have to be subject to varying

  2. Sources Of Finance

    This type of businesses liability is limited unlike a sole traders or partnership which is unlimited, this basically means that if the business is in bad debit it is the businesses debit and not the owners (shareholders) so there is no risk in them losing their personnel assets like their house etc.

  1. Edexcel Applied Business A2 unit 11 finance task A

    Customers will then pay a deposit for the hotel which can be used to pay off the hotel. Thomas Cook's other roles include booking flights and flight seats. They may book seats with other travel companies such as Thomson however they usually would have a longer time period to pay and could be up to 6months.

  2. A2 Business CourseWork

    Conflicts could arise when Tesco do not provide the things that the customers want to buy. Tesco will have to listen to customer's requests as to the things they want and ways in which to improve the business. Tesco have been clearly good at this because they have managed to keep the top market share for so long.

  1. Dear Ms C Walsh, Im writing to inform you about ...

    They make a profit by paying you less cash than they actually value of the invoice. The disadvantage could be your ability to borrow from other sources may be reduced. Another advantage could be that if you were to end an arrangement with a factor you will have to pay

  2. Sources of finance for a new business.

    year before some of us must leave school and ultimately the group, and each group has no fixed asset in the business. Each group has started from scratch and built up an enterprise over time. Bank loan This can be a short- or long-term loan that will also be secured on a business's fixed assets.

  1. Edexcel Applied Business Unit 11 Finance Task C

    which means they will know when they will gain back the initial investment back; and this method will give them this information. On the other hand payback does not take in to account the timing of other payments; therefore it may not be reliable.

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

    Ifter can withdraw his money at any given time with no penalties if he ever needed it back. So it is 100% risk free and he may win some money to put towards a deposit for a house. Ifter could also use Direct ISA?s.

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