Financial Management for Organizations

Financial Management
for Organizations

INTRODUCTION
Financial management may be characterized as the field or role of a company dealing with
productivity, investment, cash and credit, such that the organization may have the resources to
accomplish its goal in the most comprehensive way possible, often described as optimizing the
worth of the business to shareholders (Mitchell and Calabrese, 2019). Financial managers (FMs)
are skilled specialists reporting directly to shareholders. It is essential to manage financial
performance of companies in an effective manner. The report is based on two different cases in
which first one is related to Auto trader that has raised amount of £200m to reduce impact of
COVID 19. While second case is based on Carfan advertising that planned to cancel dividend in
order to overcome from COVID 19.
MAIN BODY
(a) Discusses the way in which Auto trader raised £200m of finance and compares this with
other methods available.
There is no specific information about ways in which Auto trader raised £200m of
finance. Though, this can be assumed that company might raise funds by equity financing
which is explained below in such manner:
Equity financing- Equity finance is the method of collecting money through the selling of
shares. Companies are collecting funds whether they may have a quick need to cover bills
or they may have a lengthy target and need investors to purchase in their growth. By
holding assets, they sell interest of their business in exchange for cash, such as stock
funding (Lu, Shon and Zhang, 2020). Equity capital arises from a variety of outlets, such
as friends and relatives of founders, partners or a public offering (IPO). Major
corporations like Face book and Google have raised billions of money from IPOs.
Although the word equity finance applies to the funding of public corporations listed on a
stock exchange, the term often refers to the funding of private firms. Equity finance