Managing Financial Resources and Decisions - Assignment Sample

Added on - Nov 2020

Trusted by 2+ million users,
1000+ happy students everyday
Showing pages 1 to 4 of 19 pages
Managing FinancialResources and Decisions
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11. Advantages and disadvantages of obtaining listing on stock exchange..................................12. Methods which contributes to obtain listing on London stock exchange..............................33. Methods used to raise capital in London Stock Exchange......................................................7TASK 2............................................................................................................................................82.1 Calculation of share prices....................................................................................................8a. Calculation of cost of ordinary share capital...........................................................................8b. Calculation of cost of preference shares.................................................................................8c. Calculation of the cost of debenture capital............................................................................8d. Calculation of weighted average cost of capital.....................................................................82.2 Importance of financial planning..........................................................................................92.3 Informational needs of directors, senior managers and junior managers..............................92.4 Impact of finance on financial statements.............................................................................9TASK 3..........................................................................................................................................103.1..............................................................................................................................................103.3..............................................................................................................................................11a................................................................................................................................................11b. viability of proposal..............................................................................................................12TASK 4..........................................................................................................................................124.1 Different types of financial statements prepared by the organisation and informationprovided by them......................................................................................................................124.2 Different formats of income statements..............................................................................124.3.............................................................................................................................................13a. Calculation of different ratios................................................................................................13b. Explanation stated with each ratio which calculated above..................................................13CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................15
INTRODUCTIONFinancial management is important concept which includes application of effectiveapproaches and tools which contributes in effective management of money within theorganisation in such manner that objectives are accomplished according to predeterminedstandards. It is the responsibility of the top management is to direct the functions which arerelated to funding. This will includes the use of methods of accounting to effectively record thetransactions which are happen in organisation on regular basis and provide accurate and reliableinformation timely. It improves the understanding of managers of organisation is to effectivelyinterpret the financial position of organisation and build appropriate strategies to strengthen theirposition in market. This report contains four different parts which includes description aboutMilner Chemicals Plc is a chemical manufacturing organisation which was established in 1935,Brian Harris Chartered Accountants firm, X Plc. And Wordsworth Plc (Ahnquist, Wamala, andLindstrom, 2012).In the present report explain about advantages and disadvantages which are associatedwith listing on London stock exchange, methods which assist in the process of obtaining listingin London Sock Exchange, methods which contributes to raise capital in London stock exchange,calculation of cost of ordinary shares, preference shares, debenture capital and WACC,importance of financial planning and impact of finance which is observed upon financialstatements. Also, preparation of different type of budgets as per their requirements inorganisation and main financial statements and information which is provided by each statement.TASK 11. Advantages and disadvantages of obtaining listing on stock exchangeMilner Chemicals Plc is manufacturing organisation which was established in 1935. Itdeals in manufacturing of chemicals. The whole business is owned by the Milner family and fewthousand shares are held by employees through employee share option schemes. Over the periodof time the business grows with effective rate. Unexpected event is occur in 2014 when elderbrother of Richard, who is William Milner is died due to cancer. After that business of MilnerChemicals Plc is handled by Richard who observed that skilled and loyal workforce is developedif they are able to built strong financial base. The credit crunch is arise between 2008 to 2012which impacts the financial performance of organisation. It is observed that UK is tuned up their1
position and become one of the leading manufacturing base in the world. After taking the step bythe Governor of Bank of England that the interest rates prevails low through which significanthigh is shown in stock market.Richard observed that for rapid expansion need to have high amount of funds raised atlow cost. So, advised by the senior manager is to list organisation on London Stock Exchange toraise capital. This will associated with different type of advantages and disadvantages which aregathered by Milner Chemicals Plc after listing are defined below:Advantages of listing tocompanyListing of Milner Chemicals Plc on stock exchange provides the basis from the marketvaluation of the organisation. There are large number of sources are opened with thelisting of cited organisation on London Stock Exchange to effectively raise the adequateamount of funds. This will also helps to assess the success of organisation in market overthe period of time on regular basis.Such organisations are able to list their business on stock exchange which fulfil theregulations and conditions provided by them. So, this will bring transparency in thebusiness value and helps to attain the trust and loyalty of clients and shareholders. Thiswill provides an access to acquisition currency, where shares are might use of to makeacquisition instead of cash.Helps to motivate the employees through providing rewards whose value is clear to them.In private organisation, it is difficult to assess the value of shares and options whichprovided to the employees as reward but in case of organisation they able to easily assessthe value (Almalki, FitzGerald and Clark, 2011).Listing of Milner Chemical Plc helps in development of their high brand image in marketthrough which they have the ability to attract high calibre board members. It is happenbecause on listed organisation members have trust there are least possible of chance ofdiscrepancies. This will provides the opportunity regarding development of their imageand reputation.Listing also helps in marketing of the name of organisation as it appears in stock marketreports which is published in newspapers and analysed on TV channels.Listing helps in attraction of the institutional investors of the domestic and foreigncountries.2
Desklib Logo
You are reading a preview
Upload your documents to download or

Become a Desklib member to get access