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Source of Finance in Sweet Menu Restaurant | Report

   

Added on  2020-02-05

18 Pages5027 Words39 Views
MFRD

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Sources of finance that can be used by Sweet Menu restaurant............................................11.2 Implication of various sources of finance..............................................................................21.3 Most appropriate sources of finance for Sweet Menu restaurant..........................................4TASK 2............................................................................................................................................52.1 Cost of different sources of finance.......................................................................................52.2 Importance of financial planning to Sweet menu restaurant.................................................52.3 Impact of sources of finance on financial statements............................................................62.4 Impact of sources of finance on financial statements............................................................7TASK 3............................................................................................................................................73.1 Analyse of cash budget and various decisions based upon it................................................73.2 calculation of Unit cost..........................................................................................................83.3 Viability of two proposal by using investment appraisal techniques..................................10TASK 4..........................................................................................................................................134.1 Main financial statements....................................................................................................134.2 Comparing the financial statements format of different types of organisation...................144.3 Interpreting the financial statements of Sweet menu restaurant and Blue Island restaurantusing ratio analysis....................................................................................................................14REFERENCES..............................................................................................................................16

INTRODUCTION Finance is the resource that is available with the company in order to achieve its desiredorganisational goals and objectives (Lee and et.al. 2015). In other words it can be said thatfinance resource is the money that is available with the company for investing in order togenerate profit out of it. In managing financial resources manager of the company play a vitalrole. Manager various strategies with an aim to utilize the available resources to the full extendand to achieve the organizational desired objectives. In the following report Sweet Menurestaurant which is the reputed restaurant situated in Gants Hill in East London. The restaurantwants to expand its business by opening to new business units in Central London and Croydon. In this report various sources of finance are discussed that are available with Sweet menurestaurant along with its implications. In additional to this important of financial planning toSweet menu restaurant in context of expansion of its business is also mentioned. Along with thisinvestment techniques are used by the company in order to analyse which proposal will prove tobe best? At last in this report various ratios of both the companies are calculated in order toanalyse which company financial position is good. TASK 11.1 Sources of finance that can be used by Sweet Menu restaurantThere are different types of internal and external sources of finance present with SweetMenu restaurant in order to raise its capital for the purpose of starting its two new business unit.Some of the sources of finance that can be used by the company are listed below:-Sources of financefeaturesInternal sources of financeAngle investorsBy using this method Sweet Menu restaurant can raise itscapital by borrowing from its friends and family members inorder to fulfil their objectives (Murphy and Yetmar, 2010). Forusing this method Sweet Menu restaurant is required to givetheir friends shareholding in the company.Retained earningEach and every organisation keep fixed amount of profit earnedby them with it in order to meet up its urgent requirements. Thisis one of the cost effective method that can be used by Sweet1

Menu restaurant in order to expand its business units. Bank overdraftExternal sources of financeIssue of sharesIt is also one of the best methods that can be used by the SweetMenu restaurant in order to raise its capital (Orens and et. al.,2009). By using equity shares and debentures to the generalpublic company can raise its capital. By using this methodcompany will be easily be able to open its two new businessunits.LeasingIt is one of the best external sources of finance that can be usedby Sweet Menu restaurant in order to use the asset withoutpurchasing it. By using this method company can protectthemselves in context of obsoletation of technology.Bank loanIt is the method by using which Sweet Menu restaurant canborrow money from the bank against the collateral security. Byusing this method company will be able to meet its urgentrequirement of finance (Overton, 2007). By using this methodcompany can also avail various tax benefits. 1.2 Implication of various sources of financeSourcesLegal aspectsSuitabilityCostAngles investorsSweet Menu restaurantis required to issueshares to the Anglesinvestors in order togive themshareholding in thecompany. By using this methodSweet Menu restaurantcan easily be able tomeet its financialrequirement of fundswithout following anyofficial formalities(Rasid, 2014).Angles investors arealso the shareholdersof the company. SweetMenu restaurant isrequired to paydividend to them. Thisin turn increases thefinancial cost of thecompany.Retained profitAccording to lawevery company isThis is one of the bestmethods that can beBy using this methodSweet Menu restaurant2

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