Factors Related to Finance - Report
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Added on 2020-01-07
Factors Related to Finance - Report
Added on 2020-01-07
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MANAGING FINANCIALRESOURCES AND DECISIOSNMAKING
TABLE OF CONTENTINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................31.1 Sources of finance that are available to business firms.........................................................31.2 Implications of source of finance..........................................................................................31.3 Appropriate source of finance for the firm............................................................................4TASK 2............................................................................................................................................52.1 Cost of different source of finance........................................................................................52.2 Importance of financial planning...........................................................................................52.3 Information needs of different decision makers....................................................................62.4 Impact of finance of financial statements..............................................................................7TASK 3............................................................................................................................................73.1 Analysis of budget.................................................................................................................73.2 Calculation of unit cost.........................................................................................................83.3 Project evaluation methods....................................................................................................8TASK 4..........................................................................................................................................104.1Finanicial statements of the firms.........................................................................................104.2 Financial statements.............................................................................................................114.3 Financial ratios.....................................................................................................................16CONCLUSION..............................................................................................................................17REFRENCES.................................................................................................................................18Table 1: Analysis of cash budget.....................................................................................................8Table 2 Payback period method......................................................................................................9Table 3Calculation of ARR...........................................................................................................10Table 4Calcualtion of IRR.............................................................................................................10Table 5Calculaiton of NPV...........................................................................................................10
Table 6 Balance sheet of partners..................................................................................................12Table 7 income statement of partners............................................................................................13Table 8 Income statement of sole trader........................................................................................13Table 9 Balance sheet of sole trader..............................................................................................14Table 10 Balance sheet of company..............................................................................................15Table 11 Income statement of sole trader......................................................................................15Table 12 Income statement of Non-profit organization................................................................16Table 13 Balance sheet of company..............................................................................................17Table 14: Ratio analysis of Tesco for FY 2013-15........................................................................17Figure 1Balance sheet of partners..................................................................................................12Figure 2 income statement of partners...........................................................................................13Figure 3Income statement of sole trader.......................................................................................13Figure 4Balance sheet of sole trader..............................................................................................14Figure 5Balance sheet of company................................................................................................15Figure 6 Income statement of sole trader......................................................................................15Figure 7 Income statement of Non-profit organization.................................................................16Figure 8 Balance sheet of company...............................................................................................17
INTRODUCTIONFinance is life blood of an organization and in this report different factors related to finance arediscussed in detail. Along with this method of ratio analysis is also applied on the cash flows ofthe firm in order to measure their performance. In the middle section of the report financial planis prepared and in this its importance is explained in detail. Along with this budget is preparedand trend of cash flow are analyzed. Addition to these trends of expenses shown in the budget isalso explained in detail in the report. At the end of the report project evaluation technique isapplied on the firm cash flows and most viable project is selected for the firm TASK 11.1 Sources of finance that are available to business firmsSources of finance that are available to business firms are as follows.Equity – This is popular sources of finance that are used by the business firm in theirbusiness. Under this sour5ce of finance firms issue shares in the primary market and raisefunds form the public. They make investment of the fund in the business and makepayment of dividend to the shareholders (Minsky, 2015). This is very popular source offinance and used by most of firs that are eligible to get listed in the stock exchange.Debentures- It is a written acceptance of the firm that it is taking debt from the prole thatis citizen of the nations. Apart from general public institution also makes an investmentin the firm debentures. Hence, this is very popular source of finance for the businessfirms.Bank loan- This source of finance is used by the most of business firms and under thisthey approach bank and by fulling some of the parameters determined by the financialinstitution obtain a loan (Midrigan and Xu, 2010). In return firm needs to pay interest tothe bank in specific duration. This source of finance is used by all firms irrespective oftheir size.Retained earnings- It is apart of profit that remain with the firm at the end of the year. Itis used by the firms to meet their working capital needs. There is no cost of retainedearning and due to this reasons it is preferred source of finance for the firms.1.2 Implications of source of financeFollowing are the implication of different source of finance for the business firms.
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