Advantages of using credit cards
There are many advantages of using the credit cards in our life. First, they allow us to make purchases on credit without carry a lot of cash. Nowadays, the public security of our country is not safe and peace. So, we will having dangerous if we brought lots of cash went out. But using the credit card is more protected and safe. For example, when we have the credit card in our wallet, we don’t have to carry many cash that can be stolen or lost. Especially, when we travel or take a trip to another place that will be difficult and dangerous for brought the cash. Today, Credit cards are a widely used source of convenient credit for restaurants, hotels, and gasoline stations. If we are away from home without cash, we also can receive a cash advance with a credit card. Second, it also is a safe alternative to cash. If we found that the credit card is lost or stolen, we can report the missing card to the credit card company. Then, the company will stop accepting any charges on our card. So, we won’t be charged for purchases made by someone else. We can also withdraw cash from many branches of the issuing company of from a variety of ATM’s all over the word. Besides that, using the credit card is best for the people who are planning to expand their business as a company which uses the payment option usually results in a more rapid customer payment turnaround and the statement.
Planning the finance for my new business.
Finance Introduction Finance is an essential aspect of making a business successful because if a business is not financed properly the business will become bankrupt. Businesses need money for all sorts of things. Some money will be needed before the business is ready to open. More finance will be needed just to keep the business running on a daily basis. Once the business has been operating for a while, it may need further capital to help it progress into the future. Financing a business is the process of using research to organise a firm's capital and ensure that a business does not exceed its budget. Sources of Finance There are many sources of finance which help businesses to gain all the money they need to start-up or expand. Two types of sources are available to a business, short term sources and long term sources. Short term sources include overdrafts, trade credit, factoring, higher purchase, loans and foreign loans. Long term sources include mortgages, retained profits, grants, venture capital, equity, share capital, debentures and contract hire. An overdraft is an agreed limit with a bank to overspend the businesses account to a specified limit, this benefits a business because it is easily accessible to a firm when they have short term cash flow problems, however banks charge for this facility and interest is payable on overdrafts. Trade credit is an agreement
I will be illustrating the financial state of SR building by different ratios. The ratios which Ill be using are net profit, gross profit, return on capital employed, asset turnover, current ratio, acid test ratio, stock turnover, debtor days,
TREVON MENGOT UNIT 2 BUSINESS RESOURCES P7 In this assignment I will be illustrating the financial state of SR building by different ratios. The ratios which I’ll be using are net profit, gross profit, return on capital employed, asset turnover, current ratio, acid test ratio, stock turnover, debtor days, the debt over equity and creditor ratio. SR building services Ltd Trading and profit and loss account Sales 650,000 Less cost of sales (390,000) Gross Profit 260,000 Less Expense Wages 60,000 Rent and rates 55,000 Light and Heating 18,000 Advertising 12,000 Insurances 11,000 Directors’ Salaries 27,000 Sundry Expenses 12,000 195,000 Net Profit 65,000 SR Building Services Ltd Balance Sheet as at 31st December 2006 Fixed Assets 120,000 Current Assets Stock 100,000 Debtors 35,000 135,000 Current liabilities Creditors 56,000 Bank overdraft 36,000 92,000 Net Current Asset 43,000 163,000 Less Long-Term Liability - Bank Loan 58,000 105,000 Financed By Share Capital
Tullow Oil - case study
S.W.O.T. Analysis of Tullow Oil S.W.O.T is an acronym which stands for Strengths, Weaknesses, Opportunities and Threats, and is an essential instrument often used to highlight where a business or organisation is presently, and where it could be in the future. It looks at internal factors, the strengths and weaknesses of a business, and external factors, the opportunities and threats, facing the business. A SWOT analysis is done as part of the planning process in which fiscal and operative goals are set for the upcoming year and strategies are created to achieve these goals. The process can give you an outline of where the business, and the environment it operates in, is strategically. The following SWOT analysis focuses on Tullow Oil which is operating in the Oil industry The analysis shows Tullow Oil's strengths, weaknesses, opportunities and threats. The SWOT analysis will give a clear representation of the business environment that Tullow Oil is operating in at the current time. Strengths The strengths of a business or organisation are positive features, something they do well and that is under their control. The strengths of a company can be what give it the edge over its rivals. The following section will outline main strengths of Tullow Oil Competitive pricing is a vital element of Tullow Oil’s overall success, as this keeps them in line with their
R.J. Reynolds International (RJR) is currently facing a decision of choosing between debt financing or equity financing of $1 Billion in its acquisition of Nabisco
rj reynolds international financing solution R.J. Reynolds International (RJR) is currently facing a decision of choosing between debt financing or equity financing of $1 Billion in its acquisition of Nabisco. After analyzing the various benefits of using debt financing over equity financing, we choose to issue debt. Debt financing is much cheaper than the equity or preferred stock financing. The corporate incomes used to pay for the interests of outstanding debts are tax exempt. According to the General Accepted Accounting Principle (GAAP), the taxable income is calculated by subtracting the interests by the earnings before interest and taxes (EBIT). The more accumulated interest a corporation is paying, the lower the tax bracket it would fall under. This argument can apply to issuing preferred stock as well. The preferred dividends, whether in arrears or not, are not tax exempt. Debt financing benefits the stockholders. If equity is issued, the stock is diluted and stockholders lose some control and voting rights they currently have. They would also have to share any profits when the company issues dividends. RJR has already bought back more than 17 million shares of stock between 1984 to 1985, so it would be counterproductive to issue more stock at this time. Also, the company’s stock appears to be undervalued based on market to book valuation, therefore equity
Financial documents for purchase and sales.
FINANCIAL DOCUMENTS FOR PURCHASE AND SALES Almost every business transaction is accompanied by a financial document. If you pay to enter a cinema you receive a ticket in return. If you buy a bar of chocolate you are given a receipt. If you pay for something by debit or credit card then you have to sign a printed slip or counterfoil, which confirms the transactions - because the supplier receives payment at the time the item, is purchased. You already know that an alternative to 'cash' transactions exists. Businesses buy and sell goods and services on credit. This means that payment is made at a later date. In this case, there are special business documents, which accompany each part of the transaction. At one time, all business documents were specially printed and completed either by hand or on a typewriter. Today, computers can print out financial documents automatically, as they are needed. The computer at the same time adjusts the company's accounts to show the transaction has taken place. Understanding the financial documents used in business transactions is important for several reasons. First, you are unlikely - ever - to work for an organisation that does not issue and receive such documents. Second, in your personal life you may receive such document - particularly if you buy goods on mail order. Knowing how the documents have been complied, why they are used - and
What are the major risks that financial intermediaries face and how do they manage them?
What are the major risks that financial intermediaries face and how do they manage them? A financial intermediary is an establishment or an institution which acts as a third party between investors and firms in trying to obtain funding. A general explanation would be the instance of a saver who has extra money and a borrower who needs this extra capital. A typical example of a financial intermediary is a bank, but there are more such as life insurance companies and building societies. This essay will assess the risks which financial intermediaries face and how they manage them. It is important to note that financial intermediaries do not use their own money instead they use the money of its depositors. To give a simple example of how a bank would act as a financial intermediary. Banks receive funds for depositors and while they keep a percentage in of this cash in reserve in case they want it back they lend a large percentage of it out or purchase bonds. Financial intermediaries generally provide four important services. The first one is expert advice; they can provide the best information for investing customer funds and alternative methods of obtaining finance. The second service is that they provide expertise in channelling funds; they can provide specialist advice on areas to channel funds to yield high results. The third service is maturity information this is where
The collapse of energy giant Enron.
Enron was born on July 1985, when Houston Natural Gas merged with InterNorth natural gas Company based on Omaha, Neb, and Kenneth Lay who became Enron's CEO in February 1986. In 1989, Enron began trading natural gas commodities. The company eventually became the largest merchant in North America. Enron had 21 thousand employees, operated a 25 thousand-mile gas pipeline system. It was listed as the seventh-largest company in the U.S, with a revenue of nearly 101 billion of dollars. Its bankruptcy occurred on December 2, where Enron had listed 24.7 billion dollars in assets. The collapse of energy giant Enron is the largest bankruptcy and one of the most shocking failures in United States corporate history. It embraced new technologies, established new methods of trading in energy and seamed to be a shining example of successful corporate America. But the company's success, were based on artificial inflated profits, dubious accounting practices, and some say fraud. The firm's success turned out to have involved an elaborate scam. Enron lied about its profits and stands accused of a range of shady dealings, including concealing debts. The profits eventually did not show up in the company's accounts. As the depth of deception unfolded investors and creditors retreated, forcing the firm into bankruptcy in December For Enron employees and retirees themselves, the consequences
Customer Intimacy and Other Value Disciplines
Question # 1 In Customer Intimacy and Other Value Disciplines, Treacy and Wiersema highlight three distinct "paths" or strategies to market leadership. They include operational excellence, customer intimacy, and product leadership. This paper will highlight how Wal-Mart has successfully implemented the operational excellence strategy, as well as consider future initiatives within this strategy that Wal-Mart can still incorporate. The discussion will than focus on the customer intimacy strategy and explain how Wal-mart has also incorporated this strategy in a variety of its operations. The product leadership strategy will also be briefly discussed, however, due to its limited scope in this particular environment, it will not be emphasized. Wal-Mart has effectively implemented an operational excellence strategy in its quest to continually lower costs and deliver products and services with minimal difficulty or inconvenience. Whether it be through reducing costs, through its various relationships and practices with suppliers or controlling energy consumption by monitoring and controlling lights, heat, A/C, etc from their head office or even managing inventory efficiently, Wal-Mart has effectively minimized both variable and fixed costs while also ensuring stock outs are minimized. Wal-Mart has also effectively eliminated (non-value) added production steps as it
effective cashflow management
Task 3 D1 It is now 12 months since Jane started the business. During the year she has had time to reflect on month to month trading. She has asked you as a friend to write her a report outlining the following: . What courses of action could be introduced to control the business's cash flow most effectively? 2. How will this contribute to the overall effective performance of the business operation and ultimately maximise cash flow. CASH FLOW FORECAST "Cash flow forecasting means preparing a cash flow statement for the future with predicted inflows and outflows." (Source: BTEC First Business) A business often prepares a cash flow forecast showing the money likely to flow into and out of the business in a given period. Forecasts are based on past experience of the business. Cash flow forecast include revenue such as cash sales, credit sales, loans and expenditures like wages, insurance, loan payment, etc. BUDGETARY CONTROL "A Budgetary control is a system of creating budgets, monitoring progress and taking appropriate action to achieve budgeted performance." (Source: www.brunswickis.co.uk) Budgetary control is a process of monitoring and analysing financial control within organisation. Budget "A budget is a plan, which is set out in numbers. It sets out figures that an organisation or company hopes to achieve in the future." (Source: THE TIMES 100) Budget is
