Sources of Finance The financing of every business is the most fundamental aspect of its management. Get the financing right and the company will have a healthy business‚ positive cash flows and ultimately a profitable enterprise. The financing can happen at any stage of a business ’s development. On commencement of your enterprise the business entity will need finance to start up and‚ later on‚ finance to expand. Finance sources may be internal or external but they may also be short‚ medium or
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creditors Dividends Overdraft £000 9‚600 5‚568 –––––– 4‚032 3‚408 –––––– 624 156 –––––– 468 140 –––––– 328 300 –––––– 28 –––––– £000 £000 £000 2‚250 1‚660 2‚110 780 –––––– 4‚550 750 300 450 –––––– 1‚500 –––––– 3‚050 –––––– 5‚300 1‚200 –––––– 4‚100 –––––– 1‚000 3‚100 –––––– 4‚100 –––––– Net current assets Total assets less current liabilities 10% debenture‚ repayable 2015 Capital and reserves Ordinary shares‚ par value 50p Profit and loss Hendil plc pays interest on its overdraft at an annual
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Study Guide Unit 2 – Chapter 5 Banking Section 5.1 – How to Manage Your Cash 1. What are your cash needs? Two primary sources of quick cash Savings account Borrowing Daily Cash Needs – lunch movies‚ gas Monthly Cash needs - cell phone‚ student loan‚ rent 2. What are the different types of financial services? Savings – time deposits Savings account or money market accounts Certificates of Deposit Payment Services – DEMAND DEPOSITS checking accounts and debit cards most common
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year. Ignore issues regarding external fund needed. (b) Complete the forecast table‚ using historical average ratios wherever applicable. Use overdrafts (a line of current liabilities) to indicate any external capital needed. Huiyuan will keep its cash level at HK$110 million or higher. The base interest rate of 3% applies to both cash and overdrafts. Interest rates on Huiyuan’s long-term debt will be averaged at 7.5%. (c) Determine external fund needed‚ total assets‚ earnings per share‚
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Raising Finance Source of finance Description of source of finance Advantages Disadvantrages Personal sources Peronal sources tend to be the first form of finance used by very small firms. And important personal source of finance is the savings that the entrepreneur accumulated before starting up the business. #Savings are a cheap form of finance as they do not involve paying any interest. #Using savings enables the owner to keep control of the business. This is especially valuable to those
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products and services. The company’s retail banking products and services comprise various deposit products‚ including savings accounts‚ current accounts‚ and term deposits; and loan products‚ such as salary‚ quick‚ auto‚ home‚ and secured loans/overdraft; credit card‚ debit card‚ and prepaid cards; foreign exchange and related
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length of time for the finance- Short term – less than one year Money to fund the day to day workings of the business. Commonly called working capital: current assets (invitatories‚ receivables) less current liabilities (overdrafts‚ creditors). The main types- bank overdrafts‚ bank bill and trade credit Medium term – between 1 and 5 years Usually used when business want to expand‚ purchase new equipment or develop new products. Main types are term loans‚ personal loans or leasing Long term –
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Ngee Ann Polytechnic School of Business & Accountancy April 2013 Semester Fundamentals of Financial Management Tutorial 3: Financial Accounting Fundamentals (Part II) for Week Beginning 6 May 2013. Read the Business Times article‚ “Beginner’s Guide to Equities”‚ dated on 25 April 2011 and answer the following questions: In event of liquidation‚ what right clearly distinguishes a shareholder from a creditor (who has lent money to the company)? Creditor is the priority of pay
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aside the short or long term success‚ surviving will be the main priority. Along with this‚ managing cash is also important. The cash flow forecast will enable the business owner to see how the cash is managed and whether an overdraft from the bank is needed and if an overdraft facility is needed. It will also highlight any immediate problems which will have to be sorted out. Another problem is that it doesn’t tell you anything about profitability and focuses purely on cash so you don’t really know
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they calculated a net movement in cash and cash equivalents of 46326 so cash went up by that amount. But looking at next items the balancewas minus amt of -53828. What that means is firm had a bank overdraft of that amount . At end of year reduced to -7502 but still in credit balance. So bank overdraft is form of borrowings so firm‚ what is it done paid back some of those borrowings – paid back 46326 to reduce it to 7502. What we have done on worksheet we actually taken that payment of 46326 and included
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