Financial Management for Organisations

Financial Management
for Organisations

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
a. Discussion of the way in which Auto trader raised 200 m pounds of finance and comparison
of other methods that are available for same purpose..................................................................1
b. Considering the mitigation of impact of COVID to working capital, short, medium and long
term finance.................................................................................................................................3
c. Evaluation of Dave Ellis proposal to cancel the dividend with respect to the implication for
investors with reference to Modigliani and Miller......................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Financial management could be defined as the procedure which is required to be focused
by businesses for the purpose of meeting long term financial goals and objectives. While
planning to meet all the long term goals and objectives it is very important for all the businesses
to be focused with this process as it will result in attainment of all the desired goals (Altaf and
Shah, 2017). Present report is based upon Auto Trader which is an online car market place and
raised 200 m pounds to minimise the impact of COVID 19 on business. Main aim of this
assignment is to understand the importance of financial management for all the entities so that all
the planned activities could be performed in systematic manner. This assignment covers various
topics that includes discussion of the way in which entity raised the funding and comparison of it
with other methods, mitigation of working capital, short, medium and long term finance. Apart
from this, evaluation of proposal to cancel the dividend with respect to the implication for
investors with reference to Modigliani and Miller.
MAIN BODY
a. Discussion of the way in which Auto trader raised 200 m pounds of finance and comparison of
other methods that are available for same purpose
Auto Trader generated funding of 200 million pounds by selling shares in the market
after waiving the ad fees. It was raised by it by aiming to prevent the dealing to pull out the cars
from site during shutdown. It issued shares worth 200 million new shares to boost its funding
after letting dealerships use its marketplace without any cost during the lock down. Issuing
shares in the market was the mode which was selected by the entity to raise capital for future
operational activities (Auto Trader raised funding of £200m, 2020). The main objective of this
funding option is to raise money that is known as capital. As fresh shares were issued by the
organisation in the market to raise funding so with the help of it, the entity will be able to pay for
all its operations and grow the business. One of the main benefit of it for the entity is not
obligated to make the payments of shares unlike bonds. There are various other types of options
that could be focused by business like Auto Trade for the purpose of raising capital. Discussion
of them is as follows:
Crowd funding: It is an option which is available for raising capital in which an entity
can raise money by generating small amount of money from large number of individuals with the
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