Introduction of finance

Introduction of finance

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
Suggesting the sources of funds ..................................................................................................3
TASK 2............................................................................................................................................5
1. Analysation of different types of business budgets and recommendation to partner for
informed decision-making...........................................................................................................5
2. Calculation of unit-cost............................................................................................................5
3. Comparison between the financial statements of sole trader and partnership.........................6
4. Consideration to be made for sale at 50%...............................................................................7
5. Calculation of payback and NPV and recommendations........................................................7
6. Financial statements for Hamleys Group Ltd..........................................................................9
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Finance as a term is the creation and supply of the money and investments which helps
the organization in reach its goals. In this project the given scenario is about the WoodyTrain
organization which is looking for financial funds from the addition of as partner This project will
help in understanding the sources of finance available to the business. It is the evaluation of the
appropiate sources of finance for the business project. This project will help in making better
financial decision on the basis of the given financial informations. In this project the financial
performance of the business has been analysed.
MAIN BODY
TASK 1
Suggesting the sources of funds
In the given scenario the business needs to raise he finances of £20000 for the start of its
business. Thus, the following sources of funding can be suggested to the friend which is eager to
start the business of Florist,
Personal Investment :
Before starting of the business the first investment which the business should consider
needs to be the cash or collateral assets which has been saved by the business. Investing own
savings and assests shows long term commitment of the business and prepares the business for
the being ready to take risk. In this investment the risk is with the investor but they do not have
to repay the investment amount.
Friendship Money :

This is the investment which can be borrowed from any family member or friend. It
might not require any sort of interest during its repayment however, the investor might be
interested in the having an equity on the business. Business relationship can ruin the relationship
with the friends and family (Drobetz and Johns, 2018).
Venture Capital :
There are some venture capitalists in the market which are looking for innovative ideas to
invest in, specially in a technology driven business which has the potential of high growth. These
capitalists makes high investment in the business and also desire high returns. As the company
starts growing they start selling of its shares for their own profit. Such an investment is good for
generating large amount of finances.
Angels :
These individual's also look for investing in the business but generally of small size. They
are seen to finance the business in their early stages. In return of the money invested in the
organization they desire the rights and supervision of the company's managemen practices.
Government Grants and Subsidies :
Government agencies also provides finances and grants to certain business which are in
the comprehensive listing of the different government program which at the federal and
provincial level are considered to be the criteria which can grant success to the organization.
These investments are not to be repayable but are hard to take as the government wants detailed
description and explanation to the benefits of the project and also requires different procedures.
Bank Loans :
One of the most common moethods of investment used by the sources of funding in the
small and medium sized business. The procedure towards taking the bank loan is also little
lengthy but it garantees safe money for investment in the organization (Lamperti and et.al.,
2019). The downside of this investment is that it needs the business to repay the amount along
with the interest. Paying of the interest helps the business to record and customize the repayment
of the organization.