Business Entity and Finance Assignment

MANAGING FINANCIAL
RESOURCES

INTRODUCTION
At the every business entity financial plays highly important and significant place
because without it the company not capable to make entry in the marketplace. Furthermore,
when there are financial resources are available in the firm then necessary to manage as well as
administer these all in the appropriate as optimum ways. The current is on the basis of samll
limited firm where different source of finance are to be shown and analysed for the respective
entity. At the second part it shows implications of fund on the firm in different ways and then
make the decisions. Moreover, it describes that how to make various financial decision in
business by considering several types of financial data as well as informations. At the end of
overall report, financial statements are to be evaluated of the Sainsbury Plc which operates in the
retail segment.
TASK 1
1.1 Sources of finance which are available for businesses
Sale of assets: sales of assets mean distribute and divide their own funds and assets to other
parties and they will become owner of those particular assets. Sales of assets refer to increase
number of sellers and provide them assets and fund in the effective manner. Those assets can be
tangible and intangible in nature. These types of transactions are typically private and business
involving assets(Bell,and Rasheed 2016).
 Bank loan: Bank loan is the facility provided by the banks to public. Its provide help in
financial term to customers. Bank loan is the most common and important term to public
and business firms also. Banks provide many kinds of loan to business and their
customers that may be medium and long term in the nature.
Equity shares: Equity share is refers to stock market of the country. It means stock market is the
secondary market, it’s a part of capital market in which risk value is high and profit chances is
low but in this market has all companies are listed and they have right to launch IPO in the
market. Equity share also known as the high risk market there are risk is uncertain(Fernandez, Le
Roy and Gnyawali 2014).
 Debentures: Debenture is the long term security in the financial term with fixed rate of
interest these are issued by the companies to public and also its provide the security
against their assets and fund.
1

1.2 Implication of above identified sources of finance
Financing sources Implications in form
of financial
Implications in form
of legal
Dilution of control
Sale of assets Sales of assets are
impacting may be
negative and in the
positive way in the
form of finance its
may be increase the
number of seller of the
company.
Sale of assets in the
market for has to be
follow some rules and
regulation of the
capital market if in
case sale of assets not
in the legal form so it
become illegal for that
particular country.
It can be control
through the follow all
rules and regulation
and also create some
effective policies in
that only can sale
assets and funds to
other customers.
Bank loan Bank loan firm in earn
banks high profits
because they provide
loan to customers and
business with high
interest rate.
Bank loan only
provide those persons
and company that are
able to pay loan
amount with interest
rate time to time.
Bank loans may be
control through create
some effective rules
and regulations in the
banking sectors.
Equity shares Equity market
impacting on the
financial form. In this
market have high risk
and fewer chances of
profits to earn.
Equity market has
some legal rules and
norms are made by the
government of the
country all share are
allot to clients in the
technical way.
There have transaction
should be in the Witten
and done all activates
without any fraud.
Debentures Debenture is the long
term securities that
help to increase profits
and provide security
In the legal term has
all securities are
provided under the Act
and law of the
There is having to be
control and manage all
securities transaction
in the systematic
2