欢迎来到留学生英语论文网

当前位置:首页 > 论文范文 > Accounting

Critically examine the different sources of finance available to businesses

发布时间:2017-03-21
该论文是我们的学员投稿,并非我们专家级的写作水平!如果你有论文作业写作指导需求请联系我们的客服人员

MANAGING FINANCIAL RESOURCES AND DECISIONS

TERMPAPER1

EXECUTIVE SUMMARY

The data which was used to formulate the theoretical framework was put together using both primary and secondary information. Information was gathered from the internet; the literatures and transferred prior knowledge that was garnered from an in-class discussion as a source of data. The consulting company enables companies to enter new market, increase revenues and improve operational performances, analyzes the current business operation and determines ways that the company can run smoother. Powell’s finance service which is the private company is a leading manufacturer that provides businesses with financial help and has been in existence since May 2003. The finance department of a business is one the most important departments in the business as it is in this area where all the money is managed. The financial resources in a business are what will move the business from one stage to another.The financial aspect of a job is very important as no plans of the organization can be carried out without the financial department being called for. The destination of any finance function is to achieve three benefits: business support service, lower costs and effective mastery of the surrounding”. (Griffin, n.d.).

Making decisions in a business come with tactical thinking. As these decisions can either make or break the company. “Decision making is an essential leadership skill If you can learn how make timely, well- debated decisions, then you can lead your team to well-deserved success”. (Mind Tools, n.d.). Other organizations describe decision making as the cognitive process resulting in the selection of a belief or a course of action among several alternative possibilities. So this just goes to show the relevance of good decision making because what every decision making process produces a final choice that may not prompt action. So with the financial management and the decision making a company can seek to move from strength to strength.

RATIONALE

The purpose of this research is to show the importance of the different sources of finance available to businesses. Finance is a very important factor of any business; finance is needed in every business in order to improve. There are many sources through which a company can receive its finance in order to increase its capital.

BACKGROUND

PRIVATE PARTNERS

Powell’s financial service is a leading manufacturer that provides businesses with financial help and has been in existence since May 2003, this business has grown to be one among the leading financial companies in Jamaica with both internal as well as external stakeholders. It is located in the center of Half Way Tree and looking forward to the international market. One of its stakeholders is a Willis Consultant Company who helps in assisting the policy's company’s performance, potential and assesses its communication, knowledge, information, interaction and needs as this is a major weakness of the company. This financial company is responsible for the management of the organization's cash flow and ensuring there enough funds available to meet the day to day payments, this area also encompasses credit and collects policies for the company’s customers, to ensure the organization is paid on time and is a payment policy for the company’s supplier. As a Small Business Enterprise it is difficult to compete with our competitors so we had to hire a Business Consulting Firm to create solutions to our problems, get the product on the market and to boost the sale of it so it can be recognized worldwide.

VISION STATEMENT

Powel’s financial service is the premier center that offers quality services to its customers.

.

MISION STATEMENT

Powel’s Financial with the emphasis on good customer service and well trained employees Powel’s Financial will effectively execute duties

WILLIS CONSULTING COMPANY

The Willis consultant company is owned and o3perated by Ghenya Johnson and was established in the year May 1985. Our well trained employees include: Secretary, Accountants, Marketing Managers, Human Resource Managers, Managers, General Managers, Chief Executive Officers (CEO), and the Consultants. We are located in three locations Mandeville, Santa Cruz and our head office in Kingston. This consulting firm provides professional advice for a fee. This firm employs professionalism with the specialized expertise to help governments and organizations across all industries and business functions create value for their customers and stakeholders in all areas and stages of business, we specialize mostly in assisting clients with managing information, communication, knowledge, information, interaction and needs; it lends valuable expertise and provides advice and guidance in many ways.

This company enables companies to enter new market, increase revenues and improve operational performances, analyzes the current business operation and determines ways that the company can run smoother. Our aim apart from making a profit is to continue developing our clients business in terms of communication knowledge and putting together information, creating solutions to various glitches in the business biosphere, our number one goal is to assist our clients in any way possible given them the competitive edge that is needed to succeed in their various endeavor’s. We here at Willis Consulting Company takes great pride in the advice we give as we are aware of how unforgiving this business can be. For twenty-eight years, our company has weathered the storm under the superb leadership of Ghenya Johnson thus making our name as one of the best consulting company in the region. We look forward to working with each other and every one of you in realizing your dreams and becoming the best that you can possibly be, here at Willis Consulting Company we pride ourselves on serving the local and international community. Our tract record for the various years speaks for itself, we have helped falling cooperation get back on track. We will be looking forward to working with you and we extend our deepest thanks for choosing Willis consults as the drive forcing to assist you in this venture.

VISION STATEMENT

This company enables companies to enter new market, increase revenues and improve operational performances, analyzes the current business operation and determines ways that the company can run smoother.

MISSION STATEMENT

Our number one goal is to assist our clients in any way possible given them the competitive edge that is needed to succeed in their various endeavors

OBJECTIVES

  • To identify the sources of finance available to business
  • To understand the implications of finance as a resource within a business.
  • To make financial decisions based on financial information
  • To provide an appraisal of the financial performance of a business

METHODOLOGY

In putting together information on the research the researcher, acquired a wealth of knowledge by qualitative and quantitative research methods which applied in this thesis in the course of data analysis, Primary data were collected through questions (questionnaires) asked two persons in the business field that the researcher is familiar with, these questions (questionnaires) were asked so researcher could have a better understanding.

Questionnaires can also be analyzed more scientifically and objectively than any other forms of research and can be conducted by a large number of people in a short period of time and in a relatively cost effective way. According to Leary (1995), there are distinct advantages in using a questionnaire vs. an interview methodology: questionnaires are less expensive and easier to administer than personal interviews; they lend themselves to group administration; and, they allow confidentiality to be assured. Robson (1993) indicates that mailed surveys are extremely efficient at providing information in a relatively brief time period at low cost to the researcher.

The secondary data which was used to formulate the theoretical framework was gathered from the internet; the literatures and transferred prior knowledge that was garnered from an in-class discussion as a source of data collection.

ANALYSIS

1.1

Identify the sources of finance available to a business

FINANCE

Finance is a offshoot of economics concerned with resource allocation as well as resource management, accomplishment and investment. Finance deals with matters related to money and the markets.

SOURES OF FINANCE AVAILABLE TO BUSINESS

  • Hire Purchase- this is a kind of instalment credit, which is similar to leasing the only exclusion is that the possesstion of the good passes to the hire purchase customer to the final credit instalment, whereas a lease never becomes a possessor of.
  • Leasing – this is a method of obtaining the use of assets of the business without using
  • Bank Lending-
  • Government assistances-
  • Retained Earnings- the amount of earning retained within the business has a direct
  • Ordinary/ Equity shares- this is exchanging a portion of the ownership of the business for a financial investment in the business. The ownership stake, resulting from an equity investment allows the investors to share in the company’s profits.

ANALYSIS

1.2

ASSESS THE IMPLICATIONA OF THE DIFFERENT SOURCES OF FINANCE

Sources of finance can either be long term or short term. Long term sources of finance can be paid back over many years while short term sources of finance must be paid back in one year time.

SOURCES OF FINANCE THAT COVERS SHORT TERM:

  • An overdraft facility- this is where banks allow firms to take more money that it has in its bank account.
  • Trade credit- this is where suppliers deliver the goods now and are willing to wait for a period of time before payment.
  • Factoring- this is where firms sell their bills to a factor like banks, they practice this in order to get money instantly instead of waiting 28 days to be paid the full sum..

SOURCES OF FINANCE THAT COVERS LONG TERM:

  • Owners who invest money in their business for sole traders and partner this can be their savings. For companies, the funding invested by shareholders is called share capital.
  • Loan from a bank or family/friends.
  • Debentures- these are loans made to a fellowship.
  • Mortgage- this is a special type of loan for buying property where monthly payments are made for the use of equipment’s such as cars.
  • Leased - these are equipment’s on rental and not owned by the firm, hired equipment’s are owned by the firm after final payment.
  • Grants- this can come from charities or the government to help businesses get taken up, especially in regions of high use.

ANALYSIS

1.3

EVALUATE THE APPROPRIATE SOURCES OF FINANCE FOR BUSINESS PROJECTS

Whether one is starting a new business or trying to expand on an existing one, choosing the right source of finance for the situation can be very challenging, hence there are many sources to choose from and each source of finance has its own advantages and disadvantages.

Bank Loans- bank loans can be a real beneficial beginning as I may be able to assure the personal loan or line of recognition; these loans are available to finance the purchase of inventory and equipment as easily as to hold operating well as to obtain operating capital and funds for business expansion. These loans are time honored and a very dependable method of financing a small clientele, finance firms with significant collateral and a long course record, and the terms they offer are often very rigid.

DISADVANTAGES

  • These loans are hard to prevail unless small business receives a substantive track record or valuable collateral like real land.
  • Monetary value of bank loans- interest rates for small business loans from my boxes can be very high and the amount of bank funding for which the business qualifies is often not sufficient to completely fulfil the demand.

ADVANTAGES

  • Banks will only loan money to a commercial enterprise based on the value of the job and its perceiving abilities to serve the loan by making payments on time or in full.
  • Banks do not take ownership in your business or get involved in any aspects of running the business to which it grants loan.

RECOMMENDATION

Finance is required to promote or create jobs, increase assets,produce products, run market surveys as well as to promote.Establishment thought finances on being responsive,efficient, and quantitative and risk averse. So the finance department is the heart of the whole operation of a business and that’s why this department is so important and crucial.

Finance is needed throughout the life of every company, it is needed to start a business and ramp it up to profitability, the type and amount of finance required for a business depend on factors such as the type of business, the amount of money that will be needed and the time span in which it will be needed, the success of the firm and the state of the economy. The financial needs of a business will vary according to the type and size of the business. In the early stage of any business one is unlikely to have all the capital it needs to get started, and so will have a list of ideas and options for financing. Since bank loans are the most traditional way of financing businesses it is the method that most business owners use in order to finance their business, hence it has advantages and disadvantages like any other sources of finance so one should carefully consider if it is the best option for the type of business before making a final decision.

There are two major sources of finance for any business and these include the internal and external sources of finance. The owner of the business is the one who chooses the best form of finance to be used by the business, the business can only progress if the right source of finance is being used. There are three major types of funding options that are available to small businesses and these are debt financing, equity financing and grants. Debt financing is the availability of credit or loans to small businesses that has a good credit reputation, however the cost of borrowing money is compared with the cost of equity financing for cost benefit analysis. Equity financing is the exchange of a portion of the ownership of the business of financial investments in the business.

CONCLUSION

One of the primary goals of starting up a business is for making money. Finance is the life blood of any business, for every business there is a great importance of finance. Finance is the most important thing to run any business as it helps it to grow, develop and expand; there are many sources of finance available to businesses. The classification of sources of finance is dependent on various factors and these sources of finance can be classified as internal, external, debt, equity or short term and long term. . So the finance department is the heart of the whole operation of a business and that’s why this department is so important and crucial.

There are various areas that the finance department covers which play an equally as good role as any other in the company. One of these is “Budgeting and Forecasting and this is the relation of your business and the external community. Driven by earnings and development estimates, stock prices rely on timely data forecasting to achieve optimal cost and market capitalization. Another area that the finance department covers is the payables and receivables, this where the all cash flow into and out of the business are managed. Vendors and creditors need payment correctly and on time to keep things running smoothly”. (Griffin, n.d.). In the occupation, it is best to remain liquid, possessing the right quantity of hard currency on hand and at all times must maintain payment plans tat hold back every thing on track as this is best. Small business profit from this knowledge even though not publicly sold. Possessing knowledge of raw material requirements, staff office and staffing requirement and expansion requirements force entrepreneurs to thoughtfully look at their demands. With the financial department being the core of the organization it needs to be managed properly so as to reap better results.

REFRENCES

  • Dana Griffin, n.d.The Role of Finance in a Business. [ONLINE] Available at:http://smallbusiness.chron.com/role-finance-business-290.html. [Accessed 21 January 15]
  • MindTools, n.d.Decision Making Techniques. [ONLINE] Available at:http://www.mindtools.com/pages/main/newMN_TED.htm. [Accessed 21 January 15]

上一篇:Exploring the ethical issues at Positive Accounting Solutions 下一篇:A critical analysis of CSR's financial reporting disclosures