Finance Research: Analyzing Funding Sources and Management Accounting

This report critically examines two research articles within the realm of finance. The first article, "Analysis of Financing Sources for Start-up Companies," investigates the financial strategies and funding sources of start-up companies in Croatia, utilizing a deductive approach with quantitative research methods, including questionnaires and statistical analysis. The study explores the influence of company development stages on financing decisions and the relationship between entrepreneur experience and funding methods. The second article, "Utilizing management accounting information for decision-making," employs a qualitative research method to explore the application of management accounting information in an energy company, focusing on its role in decision-making processes and identifying potential limitations. The report compares and contrasts the methodologies, findings, and conclusions of the two articles, highlighting the significance of financial analysis and management accounting in business contexts.

Method of Inquiry

Table of Contents
1. INTRODUCTION.......................................................................................................................3
2. INTRODUCTION.......................................................................................................................3
3. LTERATURE REVIEW..............................................................................................................4
4. METHODOLOGY......................................................................................................................4
4.1 ONTOLOGY....................................................................................................................4
4.2 EPISTEMOLOGY..........................................................................................................5
4.3 AXIOLOGY.....................................................................................................................5
4.4 METHOD.........................................................................................................................5
4.4.1 Tools used......................................................................................................................5
4.4.2 Target population...........................................................................................................6
5. FINDINGS...................................................................................................................................6
5.1 Keywords under the study................................................................................................6
CONCLUSION................................................................................................................................7
4 PAPER 2.......................................................................................................................................7
4.1 Abstract.............................................................................................................................7
1. INTRODUCTION.......................................................................................................................7
2. LITERATURE REVIEW............................................................................................................7
3. METHODOLOGY......................................................................................................................8
3.1 Ontology...........................................................................................................................8
3.2 EPISTEMOLOGY...........................................................................................................8
3.3 AXIOLOGY.....................................................................................................................8
3.4 Tools used.........................................................................................................................9
3.5 Sampling Method.............................................................................................................9
4. FINDINGS...................................................................................................................................9
4.1 Variable under study.........................................................................................................9
5. CONCLUSION............................................................................................................................9
6. COMPARING AND CONTRASTING.....................................................................................10
7. OVERALL CONCLUSIONS....................................................................................................10
REFERENCES..............................................................................................................................11

1. INTRODUCTION
It is very important to analyse methods through which capital is collected in business. This
is because it helps in doing financial analysis and maintaining stability of firm. There are many
other ways like consultancy which supports in financial analysis. Besides this, a business must
do proper enquiry about from where income is generated and costs are incurred. Moreover,
financial stability enables in evaluating inflow and outflow of funds within organisation. Every
business applies different models to identify source of finance. This depends on their nature and
goals and objectives. This assignment will critique two research articles based on research
methods and consultancy in finance.
PAPER ONE
“ANALYSIS OF FINANCING SOURCES FOR START-UP COMPANIES”
ABSTRACT
Start up companies and entrepreneurial ventures plays a vital role in development of nation
economy. These types of companies usually provide high and advance products and services
which can be easily reproduced. Medium and small enterprises which contribute to huge
percentage of developing countries of the world but such small and medium enterprises are not
paid adequate attention (Marina, Jelena and Maja 2014). In first article it has been analysed that
scientific contribution supports defining stages of development of start ups and financial sources.
On basis of financial strategies entrepreneurs decide source of finance. This helps them to
properly allocate funds in a start up. In this study it is been evaluated that companies
development phase also contribute in financial strategy. Moreover, scholar have describes about
different types of start ups and their source of finance in development stages.
2. INTRODUCTION
DISCUSSION OF PAPER ONE
This paper discusses about the impact the analysis of financing sources for start-up
companies in Croatia, this articles discusses about the start-up companies and their types and
what are their potential sources of financing. This paper has followed the deductive approach as
authors have collected data through questionnaires which is also called a primary source of data
which has given author a more in depth information for the research they have conducted.
Thus, authors of this articles have applied deductive research and in this research authors
are trying to make us understand meaning of start-ups, what type of financial resources are

preferred by the start-up companies of Croatia. Author have taken two hypotheses within the
research article in order to conduct research and for this they have defined and set a research
problems and also several questions were found in the article. Authors based upon these
hypotheses authors of this research article have developed outcome of the research.
3. LTERATURE REVIEW
As per the views of Åstebro & Bernhardt (2003) start up companies are those companies
which are newly found or are at the initial stage of the business. A start up is a company which is
initiated by the individual founder in order to search for repeatable and scalable business model.
As illustrated by Baptista & Mendonça (2009) start up companies may not be necessarily
associates with high tech projects as their software which can be easily produced or reproduced.
But the technology based start have got the potential for growth but also there is a risk of failure
of majority of start ups which needs to be properly analysed.
4. METHODOLOGY
A researcher has provided an introduction which provides a brief review of what is in the
research and provides a good understand of the topic and researcher have taken two hypotheses
and have conducted quantitative research in order to achieve the aim of a project. The finding of
this research is authenticated by using SPSS software and also researcher have used primary
source of data in order to collect the data which increases its reliability. In this methodology
researchers have framed a questionnaire and have gathered primary date from the number of
respondents chosen, 42 start-up companies of Croatia were selected as a sample size of a
research and conclusion were drawn by the researchers based on the responses from respondents.
This has helped us to understand what were the outcome of the research and what are the reasons
that majority of start-up companies fail in their early stage of business establishment. There is a
limited understanding qualitative research method could have negative impact on the end results
of a research project and may result in improper results. A researcher with a limited knowledge
about the research method could decrease the quality of a research and can make the research
vague.
4.1 ONTOLOGY
In paper one researcher had aim to analyse the financial sources for start-up companies
and from this article various realities like start-up companies have to go through their life cycle
which includes the three stage of development. Another reality which is revealed in this article is

that financing development of a company can be displayed as per the three phases of
development also more than 90% of young companies fails as start-up. One of the major reason
for failure is that start-up companies fail to implement the product in the way they have planned
which means that they work on wrong product development.
4.2 EPISTEMOLOGY
From the paper one researcher have claimed that it has conducted primary research in
order to achieve the aim of the project collecting a data from start-up companies of Croatia. Data
was gathered by using a questionnaire which contained a number of questions based on the
different issues of start-up companies of Croatia. Authors of this research have collected a data
from 42 start up firms of Croatia and have conducted a quantitative research which has helped
authors to achieve valid knowledge for research. Authors also have claimed that they have drawn
a conclusion from the date collected from the different sources of start-up companies and have
applied quantitative research which has provided them valid knowledge for the research
conducted.
4.3 AXIOLOGY
Researcher has used various values which have increased the validity and authenticity of
a research, by using the software SPSS 19.0, the validity of the research is increased. Authors
have gathered a data using a questionnaire which contained a question on the development of
business, sources of financing and business activities of the start-up companies of Croatia. This
primary collection of data has also increased the validity of research. A researcher claims that it
has collected the data from 42 start up companies from which 23 Croatian start up have precisely
responded which have provided them enough data for the project. Researchers have also claimed
that among the 3200 respondents only 1 out of 12 companies have survived and succeeded in
providing the service and products to customers but also 90% of young business also fails.
4.4 METHOD
4.4.1 Tools used
In order to conduct a proper research a researcher selected 42 start up companies in
Croatia and send them questionnaire through Google docs. The companies were selected
randomly. In questionnaire, questions asked were related to finance, development and business
activities of start up companies which were chosen as respondents in order to conduct a research.
In order to record data, scholar used Microsoft Excel. In addition to it, statistical data analysis

was done and for this SPSS 19.0 version was used. Apart from it, in SPSS content and
descriptive analysis and Chi Square tests were conducted on collected data to obtain precise and
relevant information for the research conducted by the researchers. So, these were the tools
which were used by the researchers for completing their research.
4.4.2 Target population
The researcher selected 42 start ups from Croatia from different sources of Croatia. There
was not basis used in selecting all samples. Moreover, a questionnaire was sent to them through
E mail to the chosen respondents. So, out of 42 almost 23 start up companies responded to
questionnaire that is 54.76%. The samples selected were assumed as representative to entire
population of start up companies in Croatia. In case of demographics researcher has chosen
Croatia as a demographic in companies were chosen and the respondents from these enterprises
were chosen. There is also the lack of clarity what kind start ups were chosen by a researcher in
the article.
5. FINDINGS
From the article it can be analysed that most of start up founders are male (96%) and
between age of 25-34 years. Besides this, they are having experience of more than 6 years. Also,
most of start ups are located in Capital city. Moreover, it is stated that 43% start up are in stage
of increasing sales of existing products, 26% in first product development. Also, in 83%
companies financial funding is informal that is from friends or family. From 42 start ups, 43%
received investment from business angles, 17% seed investment and 9% through venture capital.
At last it is said that there is no relationship between various development stages and level of
funding. Furthermore, there is no relation between experience of entrepreneur and method of
financing. Thus, in both null hypotheses is accepted.
5.1 Keywords under the study
The keywords under the study is that decision makers play a vital role in deciding the
sources of finance for start ups and depending upon the business development stage there are two
sources of financing options available that is private financing and informal methods which have
an impact on their financing decisions.

CONCLUSION
From research it is concluded that most Croatian start ups are associated with high tech
products. Furthermore, the companies prefer traditional and informal sources of finance that is
from friends and family and private financing. Besides this, it is been summarised that after first
phase, entrepreneurs seek funds from business angles and investments even if there is no relation
between experience of entrepreneur and company development with financing methods.
4 PAPER 2
“Utilizing management accounting information for decision-making”
4.1 Abstract
The main purpose of the research how management accounting information could fit in
the organisation which could help the organisations in decision making processes. For this
purpose authors have conducted qualitative method of research (Natalia Teemu and Petri, 2017).
This research article also reflects on responsibilities, roles and values of actors which are taking
part in decision making. It is also the aim of the study to investigate the limitations of utilisation
of management accounting information within the organisation.
1. INTRODUCTION
DISCUSSION OF PAPER 2
This research article is about how to make use of management accounting in an effective
manner so that decision-making process improves in terms of business context. In this research
article authors discusses about the exploratory research, thus the authors have applied inductive
research approach as authors has made exploratory case study of an energy company and the
customers of the company face the challenges in providing and using of their management
accounting information into their decision-making.
2. LITERATURE REVIEW
As per the views of Gerrish and et.al. (2015) utilising the management information is
important for the organisation as it can help in taking major decisions within the company. The
information gathered for the business should fit the business context and at the same time should
reflect the roles. Utilisation of management information is considered as an important for
decision-making. On the other hand it has been argued by Martin and et.al. (2017) that
management information is not enough for the organisation for taking major decisions and it

should rely on other factors too like ability of decision maker and suitability of a business in a
particular scenario.
3. METHODOLOGY
It can be deduced from the research article that authors have mainly focused on analytical
and actor based features of decision making and also researcher facilitated meeting within the
customer company and have chosen the actors to discuss what are the limitations for utilising
management accounting information. A researcher with limited knowledge about the qualitative
research method will generate restrictions for a researcher in various methods that will be used
for the collection of data methods such as questionnaires, survey, collecting secondary data etc.
This can result in incomplete research or improper research.
3.1 Ontology
In research paper two authors have conducted qualitative research on the topic utilising of
management accounting information for decision-making. Authors have addressed the
limitations of management accounting while combining various view points of analytical
decision-making process and also the view points of reflective actors and thus the authors have
revealed the possibilities how to enhance the practices management accounting within the
organisational context. Thus, we can to the fact that management accounting information is
beneficial for the organisations.
3.2 EPISTEMOLOGY
Authors in the research have claimed that utilising of management accounting
information in order to make decisions it requires reflections at group levels and at individual
levels. Also, authors have focused on the setting of multiple actors which reflect of decision
making process.
Authors have discussed theoretically about the utilising of management accounting in
decision making but theoretically it does provide convincing results which could have been more
convincing if authors have provided some mathematical illustrations too. Also, researchers have
used insufficient actor based orientation within the research which also decreases the validity of
research.
3.3 AXIOLOGY
Authors within the research paper two have not taken any proper values or variables,
there are not even single accounting figures which is used in the research that could have

increased the value of research and have used theoretical data for their basis of judgement. Thus,
this researcher did not hurt any of the participants during research and they have participated in
the research of free will.
3.4 Tools used
Researchers in order to conduct a research have used two types of approaches such as
Analytical approach which includes various stages of analytical decision making process from
the stages of problem identification to collection of data and its analysis. Another tool used is
actor based features where the researchers have interacted with the participants in order to collect
the information related to different managerial viewpoints.
3.5 Sampling Method
According to the research article, authors have selected two companies such as Energy
Company and Delivery Company and have used Snowballing sampling method in order to
conduct research.
4. FINDINGS
Authors have claimed that in organisation management accounting informations are not
used by the organisation in its decision making process they also claimed that managers of the
organisations lack expertise in the use of management accounting tools. Authors of paper two
also claimed that utilisation of management accounting information can help the organisations in
their decision making processes.
But the interaction with the managers could lack proper reflection or have provided
vague assumptions, so authors should have conducted in many companies or should have
expanded their study this, could have provided accurate results to researchers.
4.1 Variable under study
Variables under paper two were highlighted as actors, reflection, limitations and
decision-making process.
Also, authors have explained importance of utilisation of management accounting
information’s and limitations associated with it which restricts usage of management accounting
information within the organisation.
5. CONCLUSION
It can be concluded that authors have conducted a qualitative research and wanted to
provide information about utilisation of management accounting information for decision-

making. Paper two also provides understanding about the limitations of using management
accounting information in the organisation.
6. COMPARING AND CONTRASTING
From both the papers that carried out their research totally in two different methods one
paper has used quantitative method and another paper has been used qualitative method of
research. It can also be analysed that from both the methods which are used by researchers did
not come to proper outcomes. In first paper authors have used the approach of quantitative
methods which seems to be more appropriate as authors provides the data which gives more
reliability of the research as compared to paper 2. The tools and techniques which are used in
paper 1 is more reliable than a research paper 2 as there are software and another techniques used
which has made the research more reliable. Within the second paper a qualitative approach has
been used and it could have been much better if quantitative method of research would have been
used. Different methods which are used by the research scholars gives them an opportunity to
investigate the research differently.
7. OVERALL CONCLUSIONS
It can be concluded that both the papers have used two different methods of research in
order to provide the information and understandings by raising positive and negative points
related to each methods used by two separate researchers. Both the researches has been quite
successful in making proper usage of methods which can increase the validity of the researches
in a significant manner. But it should be noted that one of major characteristic of a good research
paper is formulating the aims and objective of a research paper.

REFERENCES
Books and Journals
Marina K.., Jelena H. and Maja L., 2014. Analysis of financing sources for start-up companies.
Vol. 19, pp. 19-44.
Åstebro T., & Bernhardt I. (2003). Startup financing, owner characteristics and survival. Journal
of Economics and Business, 55, 303–319.
Baptista R., & Mendonça J. (2009). Proximity to knowledge sources and the location of
knowledge-based startups. The Annals of Regional Science, 45(1), 5-29
Natalia, S, Teemu, L and Petri, S., 2017. Utilizing management accounting information for
decision-making. Management Accounting Information.
Martin, A and et.al. (2017). A viewpoint-based case-based reasoning approach utilising an
enterprise architecture ontology for experience management. Enterprise Information
Systems, 11(4). 551-575.
Gerrish, T and et.al. (2015). Attributing in-use building performance data to an as-built building
information model for lifecycle building performance management. CIB.