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Managing Financial Resources & Decision making in Marriot International : Report

   

Added on  2020-01-07

16 Pages4624 Words177 Views
MANAGING FINANCIAL RESOURCES & DECISION MAKING

Table of ContentsINTRODUCTION...........................................................................................................................3Task 1...............................................................................................................................................3LO1..................................................................................................................................................31.1Identify the sources of finance available to a business.................................................31.2Assess the implications of the different sources...........................................................41.3 Evaluate appropriate sources of finance for a business project........................................5LO 2.................................................................................................................................................52.1 Analyse the costs of different sources of finance.........................................52.2 Explain the importance of financial planning and provide details of how financialplanning undertaken...............................................................................................................62.3 Assess the information needs of different decision makers.............................................72.4 Explain the impact of finance on the financial statements. Describe how different sourcesof finance identified can influence the appearance of the financial statements.....................7LO 3.................................................................................................................................................83.1 Analyse budgets and make appropriate decisions............................................................83.2 Explain on the calculation of unit cost and make pricing decisions.................................83.3 Investment appraisal techniques.......................................................................................9TASK 2..........................................................................................................................................114.1 Different Financial Statements.......................................................................................114.2 Formats of financial statements for various kind of business........................................124.3 Ratio Analysis................................................................................................................13CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................15

INTRODUCTION Financial resources are very significant aspect for an entrepreneurship so, it is very essentialfor a firm to manage their funds for the aim of carry out their day to day operations effectively. Itlay down the organisation towards the achievement if they properly utilize their funds in desiredway. It can be managing if the company invest only into the profitable areas by optimumutilization of financial resources (Smith, 2014). The present report is based upon Marriotinternational that adopts only appropriate source of funds. Further, various type of ratio iscalculated of a firm that shows their financial position in regards of solvency, liquidity andprofitability. There will be also discussion on significance of financial planning that helps firm toeffectively distribute funds in each department. Apart from this, the report will also cover eachaspects of financial resource and understand cost of each source of funds. Task 1 LO1Identify the sources of finance available to a businessThere are various sources available for the Marriott International Inc. which can providelong and short-term finance to the company. The company uses the sources to increase the firmcapital, pay wages to employees and for future investment. For the company, the financialassistance is provided by bank, debentures, hire and retained purpose, share and venture capital. Bank loan: The company takes the finance from banks at definite interest rates or bysubmitting the shares to the bank (Anderson and et.al., 2015). For this purpose, mostlyfixed inter rate is chosen by the company. This is because floating interest rate valuechanges according to market. Debentures: Here financial sources are general public. From them debt is taken andinterest is paid at regular interval. Hire purchase: A short term finance which the company gets by taking assists onagreement and payment is paid. Retained earnings: For the following purpose company uses the internal sources whereearning is generated after reducing all expenses.

Share capital: Shares are sold in the capital market. The stock price is determined bystock market through certain rules and criteria. If the prices are high the company ishaving profit and if prices of share are low then company is having losses.Venture Capital: Large and establish firms provide the finance to the company. In return,the company share some of the shareholding to firm.Assess the implications of the different sourcesAs the company needs to deal internationally so company needs to make the followingimplication: FinancialssourcesPros ConsLawful Finance costBank LoanFirm has noreduction of controlFloating interestcan be riskyLegal authoritiesand formalitiesare undertaken bybank. Interest paid tothe bankDebenturesCompany don’tneed to asksomeone else forthe financeIt depends on theexpenditure of thefirmCompany ownrules andregulation areneeded to befollowed. Initial cost of thefinance is theinterest paid. HirePurchaseIn installation, theassists are paidwhich offers lessburden to thecompanyWhen interest ispaid till then newadvancetechnology maydeveloped The owner of thecompany sign’s acontract.Price is paid asthe rising capital. Retainedearning Finance price is notrequiredHike in theopportunity costNo legaldocumentrequiredOpportunity costis paid by the firmSharesFinance cot isdecided by thecompany marketpositionIf prices are low,shareholder mayleave the companyLegal and formalregularitiesneeded to becompletedCompany paysdividend onshares VentureInvestment can beShares are sharedLegal contract isShares price and

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