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Introduction

SHACKLETON ENTERPRISES LTD[l1] All expenditures within this organisation are subject to evaluation and assessment time and time again. What is the main purpose of this is; to ensure the quality of what we're distributing is maintained but at the lowest possible costs to the Company. Its was from looking at the interim cash flow forecast of the BEANY PANDA Venture Project, that a cost effective approach is required if is to attain and keep a positive cash flow in motion. What follows, is a list of recommendations detailing how these cost effective methods should be implemented. Also included in this brief report are basic descriptions of sources of finance, which can be applied for in order to finance a few of the recommendations outlined below. The suitability of finance to the need of the project will also be discussed. RECOMMENDATIONS 1- Sales reduce the credit period limit to 60-to-30 days. 2- Purchases of stock (UNITS) During the months leading up to Christmas sales are expected to rise by 2/3 to 30,000, if we use a LIFO method to rotate stock then, the 20,000 being kept in storage can be utilized saving the business a sum of �20,000. 3- Vehicles For 1/3 of the initial price of buying a Delivery van and a car to be used by sales representatives (32,000) ...read more.

Middle

be identified, * helps to minimise risks and decrease trade debtors * increase of cash sales, * generation of more capital back into the business. 2.OVERDRAFT TO ASSIST WITH PAYMENT TO SUPPLIERS AND RUNNING COSTS. Advantages of; * flexibility * The company can stand to utilise fully this facility with the bank because it act as a safety net to help the business to bounce back in the months when sales do not, prove as fruitful as anticipated. * Interest rate is set by the amount borrowed and the amount of time its borrowed for. Disadvavantages of: * BANK may require security from company to offer overdraft facility * HIGH INTEREST RATES are likely to be incurred, when more money is borrowed. * further increasing bank charges etc. if limits are exceeded with out prior notice to the bank manager. * overdraft is repayable on demand. 3.MORTGAGE FOR PURCHASE OF WAREHOUSE Advantages of; * secured on land and buildings. * can be used either to finance the purchase of the property * to provide security for a loan applied to some other purpose. * The relatively high values for a single transaction can make a commercial mortgage an attractive component of a diversified investment portfolio Disadvantages of; * A long-term financing arrangement of typically 10 -30 years. ...read more.

Conclusion

It is therefore a long term loan which is tranferable on the stock exchange. A debenture holder is not a shareholder but a creditor. This means that interest payments are an expense to the company and are allowable against profit. Although holding debentures is much less risky than holding shares, their value in the market place will vary accoring to the interest rates. For example, a debenture that pays a 10% rate of interest will be worth 10/8 or 1.25% of its face value when interest rates are 8% if rates rise to 15% it would only be worth 10/15 or 0.66% of it's face value of the loan falls and vice versa. AIM ALTERNATIVE INVESTMENT 7.SHARE PLACING Payment for the 40,000 units of stock in the form of share capital . Share capital with backers receiving money back in small lumps as dividend The 50,000 initial start up could be used to float our shares on the exchange Advantages of: * Prestige Already attached from companies previous dealing in France * We can raise money for expansion * Easier to borrow * Shares more saleable * Money value easy to determine * Cheaper than borrowing * We can issue shares to takeover other companies * Status Disadvantages of; * Outside shareholders * Market pressure to perform * Potential takeover if company owns 51% shares [l1] 1 ...read more.

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