impact of finance on business decisions
Unit 11-Impact of Finance on Business Decisions Introduction My name is Yathursan Devabalan. I am a sixth-form student at Woolwich Polytechnic School. I am currently studying Maths, Business and Economics. In business I am currently in the process of completing the coursework on 'Impact of finance on business decisions'. This coursework requires me to investigate how a business uses financial information to make decisions. So in this coursework I will look at the financial constraints faced by the business, the impacts the constraints have, I will analyse how the business monitor and control their operations of face such constraints and how they overcome them. I decided to investigate 'LH Turtle Limited' because I can find out financial information about them easily. 'LH Turtle Limited' is a family owned business that runs a hardware store situated in the centre of Croydon. Another reason why I chose 'LH Turtle Limited' is that I know several people who work there, so I can easily access financial information for it. 'LH Turtle Limited' is in a highly competitive market with likes of Focus, Wickes, BBQ and other DIY stores. 'LH Turtle Limited' find it very challenging competing in the market as there is large DIY stores who sell at low prices. Also as 'LH Turtle Limited' is located in centre of Croydon it restricts number of sales 'LH Turtle Limited' makes as there is
Business resources M1
Merit 1, Asses how managing these resources can improve the performance of your selected organisation. Managing business resource is vital for any business if they are determined to do well. A business has two types of resources and by managing the business resource it can improve the performance of the business in many areas such as profit margins and market share. If Sainsbury use they staff in an appropriate manner and make use of all they skills and abilities then the business can gain high amount of output for instance high level of productivity, motivated and improve team working. The business can give the staff training to broaden the skills and abilities of the staff which will benefit the business has the staff will be multi-skilled and will be able to work in different areas so if there was a staff absent another staff can filled and do the job task required.. There is two kind of training that could be given to the staff one is one the job training and the other is off the job training. This will benefit the business as it will have staff who can do various task and might decide to save money by making some employees redundant. If Sainsbury manages its equipment appropriately use the equipment to it full capacity and strength then the business can gain good level of productivity from the machine. If the business uses it equipment appropriately it will improve
Birmingham Bullring- Website Case Study
Task 3a Birmingham Bullring- Website Case Study What the Bullring is? Bullring is a shopping centre that has introduced over a hundred shops, and has the latest technology such as plasma screens and touch screens. The plasma screen are 30-61 inch, these provide information such as traffic updates, job vacancies, and are also used by retailers for multimedia advertising campaigns. The touch screens supply information about shops and the Bullring itself, theses facilities also provides latest promotional offers, job opportunities, train times, traffic updates it also provides them to check their bank accounts. Soon they will be able to purchase cinema and train tickets. Who developed the Bullring and what companies were involved? The Bullring development was started of by the Birmingham Alliance- this is a partnership between... Hammerson plc: Is a leading European property company, with operations in the UK, France and German. They specialize in investing and developing shopping centres, retail parks and prime offices. Henderson Global Investors Ltd (now the Pearl Group Ltd): This is a leading international company; it provides a wide range of investment products and services to institutions and individuals is Asia Pacific, Europe and north and South America. Pearl Group Ltd: Is a financial service that specializes in management, it mainly focuses on investment
Calculation of Future Values Exam Question - Given the recent drop in mortgage interest rates, you have decided to refinance your home.
Q1. Given the recent drop in mortgage interest rates, you have decided to refinance your home. Exactly 4 years ago, you obtained a Rs. 275,000.00 15-year mortgage with a fixed of 11% APR, compounded monthly. Today, you can get a 15-year loan for the currently outstanding loan balance at 8% interest, compounded monthly. This loan, however, requires you to pay a Rs.250 appraisal fee and 3 points at the time of the refinancing (1 point equals 1% of the amount borrowed). Ignore tax considerations. If you refinance, how much will your new monthly payments be after you refinance? Answer - 1 Solution:- Borrowed Amount P.V.A (11%, 15yrs) (Refer P.V.A table) Now, we will ascertain the interest amount for 4 years a) So, 2, 75,000 - 38242 = 2,36,758 (11%, 15yrs) So, the monthly installment amount would be 3,186 2, 36,758 - 33,909 = 2, 02,849 (11%, 14yrs) 2, 02,849 - 30,051 = 1, 72,798 (11%, 13 yrs) 1, 72,798 - 26,617 = 1, 46,180 (11%, 12 yrs) Working of part 1 sums:- Appraisal Charges - 250/- (1) And 3% * 1, 46,180 = 4,386 (2) So, adding 1 & 2 we get 4,636 Again, by applying the formula we can find out per month instalments charges on 1, 46,180 Borrowed Amount P.V.A (8%, 15yrs) (Refer P.V.A table) = 17,077 for 1 year 12 = 1,423 for one month @ 8% Q2. Ramesh and Laxmi wish to buy a new home. The price is Rs56, 500.00 and they plan to put 12%
BUSINESS CONSULTANCY
Task 4 (P3) Sources of Finance available to Joseph Chamberlain Sixth Form College There are two types of sources of finances namely internal sources and external sources. Internal sources of finance can be from savings or profits however external sources of finance can be from outside the business such as banks, shares etc There are many different sources of finance available generally however it depends on the actual business type. For JCC the sources of finance available to them are as follows: * Banks - banks are able to offer loans, business accounts, commercial mortgages and overdraft facilities based on the business plan. Interest is payable based on the predicted risk. Some security will need to be provided, e.g. assets such as college premises. * Overdraft - an arrangement with the bank where a business will be able to borrow more money from its bank than is actually in their account. JCC does not need to use this service as it has to pay interest on the amount they go overdrawn. * Trade credit - when a business sells its goods and then allows the customer to pay at a later date. Goods have to be paid for within an agreed time limit. JCC do use the trade credit source of finance as they purchase the resourses such as stationery and computers. * Factoring - when a business sells off its debt to another company. JCC might use this source as they would have got the
Balance sheets and banks assets. Likely effects of the recession on business.
Global Business Context-Spring assignment The purpose of a balance sheet is to ascertain the financial position of a business at a certain moment in time .The balance sheet is comprised of assets that the business hold , and claims (in this case liabilities) that are held against the business. An asset is basically a resource that is held by the business, these can either be tangible assets (assets that have a physical substance and can be seen or touched) or intangible assets (assets that have no physical substance but can still benefit the business like patents). Liabilities represent the claims held against the business by either individuals or organisations. These can refer to the supply of materials on credit or the lending of money to a business .These claims will eventually need to be paid back. The relationship between the two is simple. If a business needs to acquire assets, it needs to raise the necessary funds in order to so. These funds may be provided by the owner (capital) or by an source outside of the business (liabilities).Therefore Assets= Liabilites+Capital. This is the money 'put-up' by the bank's owners that is used to cover any potential losses on assets incurred by borrowers defaulting on their loans, or losses made on any investments that might subsequently collapse. Ratio 1. Leverage ratio = total equity÷total assets . 2.Capital Ratio =
Explain what is meant by capital and revenue expenditure, indicating why the distinction is important.
Capitalisation and Depreciation . Explain what is meant by capital and revenue expenditure, indicating why the distinction is important. According to Hall et al. (2009), expenditures below could be separated into two categories - capital expenditure and revenue expenditure. Generally speaking, a start-up needs finance which is say - the initial expenditure-- to buy such as raw materials, and equipment. If getting successes, it can earn money back from sales; however, it needs to be used to repeat what they have done with initial expenditure, i.e. continuously to buy raw materials and other settlements (Hall et al., 2009). What's more, businesses will be expended when the owners want to. Therefore, extra money will be needed over the previous sales scale to obtain larger premises, more equipment and workforce. To put it simple, Perks & Leiwy (2010) indicated that capital expenditure is spending on items which will be shown on the balance sheet. Due to it adds to the purchase of fixed assets, under which the heading 'non-current assets', also, including the maintenance and repair of buildings and machines which are as depreciation as well. These amounts are carried forward as part of the next year's opening statement of accounting position due to its contribution on several periods' revenues (Thomas & Ward, 2009). Appearing on the income statement, showing the payments for
Dear Ms C Walsh, Im writing to inform you about the different sources of finance that are available to you.
Ninthusha Satkunalingam 2 barley lane Chelmsford Essex CM1 2NP 6 March 2012 PRIVATE AND CONFIDENTIAL Our ref: RF56/NTV The Mini- mart 23 Clanmill Avenue Chelmsford CM2 9UY Dear Ms C Walsh, I'm writing to inform you about the different sources of finance that are available to you. There are twelve different source of finance available these are: * Share issues When your company wants capital to finance business or to run your business activities it goes to the public and issue shares to produce amount from the public and people pay the amount in share capital of your company which mean your shares in share capital of your business this process is called share issue. The advantage of share issues is that your business object becomes more profitable and has a huge amount of money to buy assets and make improvement on your business. A business object becomes more profitable and has a huge amount of money to buy assets and advance their business. The disadvantage could be that your business becomes dependent on the public, if the public decides your business wasn't worth the investment and take it away, the business will go into negative equality and eventually your business will be in debt. * Leasing Leasing something is the same as renting it. You pay the leasing every month for the use of the equipment. The contract made with the lessor lasts a number of years
Prepare a monthly budget for Ms Masters that would account for the needs of each person in the family.
The Task Ms Masters earns a salary of J$40,000 each month after all statutory deductions have been made. She is a single parent with two children ages 2 years and 14 years who both live with her. She gets J$5,000 per month for child support. She pays J$7,000 per month for rental, uses both electricity and water and has a loan with a furniture store for which she pays J$516 per year. She does not have a landline telephone. . Prepare a monthly budget for Ms Masters that would account for the needs of each person in the family. If an Item is not in the budget, give a reasonable explanation of how that need would be met. ________________ Pre- Preparation What is a Budget? A (home) budget is a financial plan of one’s income and expenses, usually expressed over a period of one month. After adding up all your sources of income, you have established the total amount of money you have to spend. Next total all of your individual monthly expenses. This may range from your rent or mortage right down to a daily snack or newspaper. Your budget can be as simple or complex as you want it to be. Purposes of a budget Individuals plan/make a budget in order to: . guide and organize one’s spending 2. recognize and correct areas of overspending and waste 3. avoid impulse buying, i.e. buying items that you do not want or haven’t planned to buy. Benefits of a Budget Effective
Internal control report Marlene Enterprises. This report focuses on the internal control over cash, which ultimately assists in the managing and the keeping track of cash.
Internal control report Marlene Enterprises 25 October 2007 INTRODUCTION Internal controls are essential to ensure efficiency in a business as they prevent thefts or frauds and detect errors. Control over cash is one of the important aspects in safeguarding the assets of the business, since all transactions involve receipts and payments of cash. Cash, however, is untraceable once lost, unlike source documents, so that it has to be tightly controlled and monitored. This report focuses on the internal control over cash, which ultimately assists in the managing and the keeping track of cash. GOOD CONTROL OVER CASH All cash received should generate a source document. The present procedure of writing receipts for any cheques received from the mail profitably assists in the safeguarding of cash. However, receipts with errors should not be destroyed. They should be marked with 'cancelled' and to be kept for auditing and other purposes. The cancelled receipts should be filed in numerical order since that all receipts, or source documents in general, should be able to be traced. Entries should be recorded in a cash remittance book when cash is received through mail. No cash should be taken from the cash register to pay for other expenses. Cash in the cash register should match the tape recording the daily cash sales. This, again, ensures cash to be safely guarded and
