Managing Financial Resources and Decision in Organisation

MFRD

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1................................................................................................................................................1
1.2................................................................................................................................................2
.....................................................................................................................................................4
1.3................................................................................................................................................4
TASK 2............................................................................................................................................5
2.1................................................................................................................................................5
2.2................................................................................................................................................6
2.3................................................................................................................................................7
3.1................................................................................................................................................8
3.2................................................................................................................................................9
3.3..............................................................................................................................................12
4.1..............................................................................................................................................15
2.4 And 4.2................................................................................................................................15
4.3..............................................................................................................................................17
Conclusion.....................................................................................................................................18
References........................................................................................................................................1

INTRODUCTION
The Financial management is the base of an organizational growth, survival and
sustainability. The decisions taken in an organization are directly affected by the financial
management. With the help of financial statements the current position of the company can be
analyzed, and the resources available can be evaluated with the company's performance.
Financial management is a broad term which includes financial resources such as balance sheet,
profit and loss statement, cash flow statement and budgetary control statement. The financial
statement is prepared at the end of every year so that the financial position of the company
during the year can be analysed and the new plans to improve them can be made.
TASK 1
1.1
A company needs various sources to finance its new business or existing business or for the
expansion of the existing one. The sources of finance for different types of organisation are
different. Presenting here sources of finance for different businesses. New Business: A company for starting up a new business needs some sources of finance,
so that it can establish its business in the market. The company while starting a new
business can use its own saving (Booker, 2006). Other option is to have an equity finance
and debt finance.
1. Equity Finance: The Company can finance its business with equity. The company
can make an initial public offer (IPO). It can sell its share to the public at large and to
the major market holders.
2. Debt Finance: The Company can take loan from banks to finance its business. The
loan can be short or long term and can be secured or unsecured.
 Existing Business: The Company also take on lease or hire purchase, the assets which
are used in the business, for recovering the amount due from the creditors it can take the
services of factor (Broadbent and Cullen, 2012). Retained earnings can also be used as
this option will be available easily for the existing business.
 Expansion of an existing business: The Company needs external and internal sources of
finance in case of expansion. It depends on the area in which the company is expanding
its business. Internal sources of funds will include options such as retained earnings,
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