Managing and Business Finance

Running head: MANAGING AND BUSINESS FINANCE
Managing and business finance
Mandeep Singh
102779

1MANAGING AND BUSINESS FINANCE
Table of Contents
Part A – Business background......................................................................2
Part B – Relationship of agent and principal................................................2
Part C – Analysing project through capital budgeting..................................2
Part D – Key performance analysis..............................................................3
Part E – Financial risk...................................................................................4
Part F – Issues in global business.................................................................4
Part G – engagement with stakeholder........................................................5
Part H – compliance with internal and external requirements.....................6
Part I – Application of business knowledge..................................................7
Part J – Application of appropriate behaviour...............................................8
References...................................................................................................9
Appendix....................................................................................................11

2MANAGING AND BUSINESS FINANCE
Part A – Business background
This paper is based on the Warehouse Group New Zealand. The firm
is founded by Stephen Tindal in the year 1982. It is one of the largest retail
groups of New Zealand. This group mainly consist of Noel Leeming,
Torpedo7, Warehouse and TheMarket. At present the entity has 12,000
employees. The main business of the firm is retailing
(Thewarehousegroup, 2019). The firm has several retail stores across New
Zealand apart from its own online shopping application. The online
shopping application of the firm is also one of New Zealand’s highest rated
retail applications. The firm operates under the retail industry and this
industry has the highest competition among all the other industries. Major
financial goal of the entity is to enhance the margin in 1 year period with
goal for achieving considerably better margins over the period of next 3
years. Key competitive advantage of the entity is its capability to reach
the customers through physical stores as well as online stores through
phone supports (Thewarehousegroup, 2019)
Part B – Relationship of agent and principal
The agency theory is the standard which is applicable to solve the
issues between the principle of the business and their agents. Here, the
principle is the shareholders of the firm and the agents are the executives
of the firm as shareholder invest the money and the executive of the firm
operate the firm for the shareholders. The shareholder of the firm has the
monetary interest in the firm. As the shareholder invest his money in the
firm in lieu of the shares. Hence, they expect that firm will generate
revenue and they will get their share of profit. Stakeholders of the entity
include its suppliers, employees, clients, directors and management team.
Suppliers are interested in the company regarding receipt of their
payment for the supplies made to the entity. Further, the suppliers need
business to be continued for buying their goods for maintain its own
profitability as well as long term financial growth (Bosse & Phillips, 2016).

3MANAGING AND BUSINESS FINANCE
Part C – Analysing project through capital budgeting
Asssumptions taken as
follows -
Increase in Sales revenue
each year 1%
2019 sales revenue
(sales of 2018)
+1%
Variable cost 60% of sales
Initial investment
$
2,300,000.00
Depreciation method
straight line
method
Useful life 3 years
Tax rate 28.00%
Discounting factor 13%
The capital budgeting of the firm for base year shows the negative
cash flow as this is the initial investment of the firm amounting to $