We also need to determine the implications and related advantages and disadvantages of the sources of finance. Apart from this, Mrs. Jessica Bell wants to purchase a property of 350000 pounds for the business purpose and for this she is considering a long term loan for 12 years and a mortgage of 25 years. She has 70000 pounds for initial deposit for the property. Now we need to calculate and analyze that which one will better option for her for buying the property. Apart from this she needs to understand the meaning and importance of financial planning and the information that are needed about a business by the investors and shareholders. We also need to describe the different types of budgets and the importance of budget analysis in decision making process. we will also analyze the financial statements of a profit making organisation.
Venture capital funds support growing firms during their inception stages and before they are going for initial public offerings of shares. Firm will get venture capital as a form of equity capital. It represents a highly risky investment in the hope of earning higher return in future. It typically invests into equity or quasi equity instruments in financial market which will be able to share the risk and profit of the investee firm. Venture capitalist not only invests in the new company but also guides the firm actively in taking major decisions. Financial burden of the assisted firm tends to be low. Venture capitalist normally close it position by liquidating the investment from the assisted firm after 7 years. (Chandra, 2011, p.436).
Personal or commercial loans from banks and financial institutions are one of the most popular forms of financing. It includes long term and short term loans. Long term loans are useful to finance fixed assets and large expenses like buildings, property and machinery. Short term loans are having duration of one year or less. These are