5287 Managing financial reources

MANAGING FINANCIAL
RESOURCES
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Table of Contents
INTRODUCTION ...............................................................................................................................3
TASK 1 UNDERSTANDING SOURCES OF FINANCE AVAILABLE TO BUSINESS .................3
Scenario 1.............................................................................................................................................3
Information pack for new and existing businesses which Identifies the sources of finance
available to business....................................................................................................................3
Implications of source of finance along with its advantage and disadvantage...........................5
Evaluating appropriate source of finance for business project...................................................7
M2: Appropriate source of finance for small business................................................................8
CONCLUSION....................................................................................................................................8
REFERENCES.....................................................................................................................................9
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INTRODUCTION
Management of financial resources is necessary in every organization and it is required for
smooth functioning of the enterprise. Further, every organization prepares different plans through
which finance can be managed in an appropriate manner. This allows business to focus on its key
activities and in turn boosts overall efficiency of the firm (Reid, 2003). Different sources of finance
are present which businesses can consider for satisfying its financial needs but it depends on every
organization which source to adopt so as to gain long term benefits with the help of this. To
consider implications of sources of finance is also necessary as through this appropriate decision
can be taken easily. The present study is being carried out by focusing on the range of finance
available to business along with its implications such as advantage, disadvantage etc. Apart from
this, three case study examples have been discussed in the report which involves small business
start up, large expansion etc.
TASK 1 UNDERSTANDING SOURCES OF FINANCE AVAILABLE TO
BUSINESS
SCENARIO 1
Information pack for new and existing businesses which Identifies the sources of finance available
to business
Different sources of finance are present in business with the help of which enterprise can
easily satisfy its financial needs. Selecting most appropriate financial source depends on the nature
of business, its size and type of operations being carried out in the company (Vermeer, 2002).
Further, to avoid unfavourable situations appropriate sources are adopted by the management which
enhances organizational performance in the market. Long and short/ medium term sources are
present in business but decision has to be taken which source has to adopt which is cheap and can
enhance profitability level. Different sources of finance present are as follows: Share capital: It is regarded as one of the most effective source of finance which usually
every organization considers. In order to satisfy financial needs business can issue equity
shares in the market through which large number of investors can be attracted. This source
of finance is generally suitable for businesses which are old and large. Companies which are
operating on wider platform can issue shares in the market and can easily raise additional
funds with the help of this (Weaver, 2012). By adopting this source it is possible for the
business to avoid unfavourable situations such as inadequacy of finance which can further
enhance overall reputation in the market which is one of the main objectives of firm behind
carrying out operations in the market.
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