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Financial Resources - Essay Example
Pages 7 (1757 words)
It has expanded operations(Helfert E, 1997) to North America. The company has acquired various sources of funds thru issuance of stocks and borrowings of long term loans. The handling of its financial resources are clearly explained in the succeeding sections.
The financial statements(Harvard Business School, 1998) is a big factor that will be entice prospective investors to invest in Caffe Nero because of its 2005 net income of 1,719,000 pounds and 2004 net income is 1,684,000.
News of a merger or acquisition by one big company of another big or small company will generate another round of huge investments in the new company. The prospective investors can artificially cause the stock market price of Caffe Nero to go up. The stock market price for a single stock of Caffe Nero has increased because many investors want to put their money in the income generating Caffe Nero. The closing price of Caffe Nero stock is very high due to its aggressive marketing strategy. According to Allegra Strategies, the United Kingdom coffee industry will rise by more than 10% annually for the next few years.
Stock market listing of the stocks of Caffe Nero and other companies will generate funds for their business. The stock market price is based on the basic economic principle of supply and demand principle.
But if there are more people offering to dispose of their stock market shares in a company, like the Caffe Nero located in picturesque England than there are buyers, then the tendency is for the stock market price to go down. In the case of Caffe Nero, the market price just remained the same for the past years.
of whether the company earns money or not. ...
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