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Managing Financial Resources and Decisions - Sample Assignment

   

Added on  2020-01-16

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MANAGING FINANCIALRESOURCES ANDDECISIONS1
Managing Financial Resources and Decisions - Sample Assignment_1
TABLE OF CONTENTSINTROUCTION...................................................................................................................................31.1 Available source for financing the business...............................................................................31.2 Assessing various implications of financing sources on firm....................................................41.3 Selection of the most appropriate retail store.............................................................................4TASK 2.................................................................................................................................................52.1 Cost of various sources of finances............................................................................................52.2 Significance of financial planning in a business........................................................................52.3 Informations needed for financing decision makers..................................................................62.4 Impact of finance sources on the financial statements...............................................................6TASK 3.................................................................................................................................................73.1 Preparing budgets and its analysis for the best decisions...........................................................73.2 Unit cost and pricing decisions..................................................................................................73.3 Investment appraisal techniques applications............................................................................8TASK 4...............................................................................................................................................104.1 Types of financial statements...................................................................................................104.2 Final accounts differences in different organizations...............................................................114.3 Analysis financial statements using financial ratios.................................................................11CONCLUSION..................................................................................................................................122
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INTROUCTIONNow-a-days, financial decisions becomes the key or central element of the business successwhich assist entrepreneurs to generate sufficient amount of capital and utilize it optimally foraccomplishing the goals. In UK, small and medium sized enterprises make substantial contributionto the growth and success of the country. Therefore, the assignment is prepared here to examine thefinancial requirement of a small sized retail store named ABC Ltd to deliver excellent retailingservices to the people. The report will emphasize on identifying distinguish sources of capital tomeet corporate funding needs. Furthermore, it will present the various key decisions like costing,pricing, long-term investment decisions etc. for the proper functionality. Lastly, a well-establishedand leading hotelier, Hilton Hotel & Group’s financial performance will be examined and comparedwith the rivalry Marriott. TASK 11.1 Available source for financing the businessIn the corporate world, finance takes very important place and the corporations needs therespective resources in proper and adequate manner. When the ABC Ltd. has not adequate financethen there are various kinds of sources are available which provide such kind of services to it. Incontext to this, various types of sources of finance which are available are such as follows:Sale of assets: It is an internal source of finance where the company raise fund usinginternal condition of the firm (Brigham and Ehrhardt, 2013). As per the source the ABC Ltd. saleit's those assets and equipments which are unused and unproductive for the firm. After selling theassets whatever sum of money comes is to be use in business expansion.Equity financing: Another source of finance is equity which is mostly used externalfinancing source by the firms. In this the company issues it's shares in the stock market which arepurchased by the shareholders. Further, investment which is made by the investors is to be used bythe business entity for expanding the firm.Bank loan: It is also external financing source which provides financial resources andservices to the company for expanding the firm in another market. Here the management has tofulfil all the process of applying loan and then bank determine valuation of it. After that the ABCLtd. able to raise fund easily in the market. It is little costly and risky as compare to equityfinancing.3
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1.2 Assessing various implications of financing sources on firmFinancing sourcesLegal implicationsFinancial Implications Dilution of controlSales assetsBeing an internalsource for raisingfinance there are anykind of legal rules arenot implement there.Using an internalsource it leads toreduce total assets ofthe firm. While helps toincrease sales andturnover at the end ofyear (Nickel, Saldanha-da-Gama and Ziegler,2012).There is no dilution ofcontrol.Equity financingHere the companyneeds to listing in thestock market becausewithout this it not ableto issue shares inmarket.In this case, equitycapital will be improvein the business which isbeneficial for it. Apartfrom this financialleverage of thecompany will alsoimprove.In this control is dilutedwith new shareholders.Bank loanThe ABC Ltd. has tocomplete all thedocumentation processand show its liquidityposition to the bank.In this the company hasto give interest amountto the bank in terms ofcost of finance whichlead to reduce netprofit.Control will not dilutewith bank loans.1.3 Selection of the most appropriate source of financeFrom the above mentioned different source of finance equity financing is the most widelyused and effectual source in order to raising fund. Moreover, it can be said that equity financing isappropriate and suitable for the enterprise. Benefits and disadvantages of respective sources are asbelow:Advantages: Very main benefit of the equity is that the company able to raise fund whenever4
Managing Financial Resources and Decisions - Sample Assignment_4

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