Finance Assignment | Different Sources of Finances

Managing Financial
Resources and
Decisions
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TABLE OF CONTENTS
Introduction......................................................................................................................................4
Task 1...............................................................................................................................................4
1.1 Understanding source of finance available to textile business..............................................4
AC 1.2 Implications of different finance source on textile firm..................................................5
AC 1.3 Evaluation of appropriate source of finance for textile business....................................6
Task 2...............................................................................................................................................6
AC 2.1 Cost associated with sources ..........................................................................................6
AC 2.2 Significance of Financial Planning in Textile business...................................................7
AC 2.3 Information requirement of various internal and external stakeholders..........................7
AC 2.4 Impact of above discussed finance sources on firm's financial statements.....................8
Task 3...............................................................................................................................................8
3.1 Preparation of projected cash budget and take appropriate decisions through analysis........8
3.2 Unit cost calculation and make appropriate pricing decisions.............................................10
3.3 Analysing project viability through different investment appraisal techniques..................10
Task 4.............................................................................................................................................13
4.1 Main financial statements....................................................................................................13
4.2 Comparison of formats of different businesses...................................................................13
4.3 Interpretation of J. Sainsbury's financial statements through ratio analysis method...........14
Conclusion.....................................................................................................................................14
References......................................................................................................................................15
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INTRODUCTION
In the present scenario, every business enterprise is required to manage their financial
resources in order to achieve higher sales and profitability. Further, effective management of
finances also supports organizations in getting better opportunities for growth and development.
It also plays very important role in carrying out smooth flow of activities and operations of a
business enterprise. The present report reflects the key and different sources of finances which
are available to organizations. In addition to this, it also highlights the implication and evaluation
of all available sources of finances.
TASK 1
1.1 Understanding source of finance available to textile business
The main objective of a textile business behind carrying out its operations is to
manufacture cloth and then supplying the same to people in the market. In order to produce
cloths different type of resources such as human, financial and technological resources are
employed by businesses in the textile industry. Along with this, bid is also carried out by these
organizations in order to make sure that the best and most effective quality of raw material is
acquired. According to the provided case scenario, the owner is looking forward for investing
£300000 in bidding of the raw material. Furthermore, the problem is that the owner is also
having £20000 with himself. The remaining amount can be raised by using a variety of sources
which are highlighted below as:
 Bank Loan- It is considered as one of the most common and trusted source from which
businesses can raise required funds (Ferguson and Smets, 2010). In order to make
arrangements for remaining amount, the owner of textile business can take loan from
bank and will be required to pay a particular interest against the sum which has will be
issued.
 Overdraft from bank- It is a kind of sources of finance in which the people can withdraw
more money from bank as compared to what they are having in their respective bank
account.
 Personal saving- In order to raise funds, people can also make use of the amount which
they have saved for their future.
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