Financing: Long Term and Short Term

Financing: Long Term and Short Term Essay example
College
Essay
Finance & Accounting
Pages 10 (2510 words)
Download 0
Title: Financing: Long-term and Short-term Student’s Name: Heather Jenks Course Name: Corporate Managerial Finance Course Code: BUS 657 Instructor: John Brock Date of Submission: Introduction Any form of investment or business need to acquire finance that they will use in one way or the other in order to get established…

Introduction

There are two major categories of financing that normally exist in most businesses (Jim, 2011). These categories are short term and long term financing methods. These categories basically differ in the period for which they are provided to the business. For instance, short term financing is a type of financing that is provided for a short period of time, usually not exceeding one year, to the business. On the other hand, long term financing is any type of finance source for a business that is provided for a long period of time, usually exceeding one year, to the business. This paper aims at discussing the two categories of financing, their applications, examples, current trends and real experiences with the two categories of financing. Short-term Financing This is the type of financing for a business that is normally required for a short period of time, usually less than one year (Pagirl, 2009). It is normally required by the business in order to provide the working capital for the business. The working capital is the capital that is used by the business to purchase raw materials required by the business on a daily basis, payment of salaries and wages, and to meet the day to day expenses of the business (KreditnaBanka, 2012). For example, a company like Nestle may require performing a number of activities in the coming months. ...
Download paper
Not exactly what you need?

Related papers

Short-term obligations
.9 Introduction ‘Short-term’ obligations are liabilities owed by an institution to outsiders and are due within a period of less than one year. They can be understood as part of an organization’s assets that have been contributed by external sources. The obligations include creditors, accrued expenses, and ‘short-term’ loans. This paper seeks to discuss the financing of ‘short-term’…
Long-Term Sources of Finance
preference equity, common equity, debt and leasing. Long-term Finances A business needs funds for capital investments such as fixed assets like plant, machinery, land, building, furniture etc. These assets must be financed with long-term financing sources. The chief financial officer (CFO) is usually responsible for making suggestions to the senior management and board of directors related to…
Financing The short Term Obligations of the Business (BMW vs Mercedes)
Since these finances are obtained for short terms, therefore they are required to be paid back to the lenders earlier in comparison with the long-term finances. Thus obtaining short term finance for business gives rise to short term obligations, and these short term obligations may include short term loans, amounts owed to the suppliers of the business, amounts owed to other parties to whom…
Financing the Short Term Obligations
Body Paragraphs Task 1 Short term financing is vital for any kind of business in order to meet its financial necessities in a short period of time. Consequently, there are various sources of attaining short term debts. However, the four primary sources of short term finance available to any business comprise of Trade Credit, Bank Credit, Customers’ Advances and Commercial Paper. Trade Credit…
Financing the Short Term Obligations of The Business
b. Retained earnings Retained earnings are profits that have been retained within the business for use in the operation of the business instead of being paid out as dividends to its shareholders. One of the operational uses of profits retained in the business is meeting the business short-term obligations. c. Capital Market Sourcing funds through the capital market simply meant getting additional…
Capitol Budgeting Long Term Financing
Capital assets receive attention because they commit a firm for long term. These capital assets are commitment of over a year and sometimes for decades for instance, real estate. Economically, the resources being scarce and competitive in nature, there would be wrong allocation of such resources at the wrong time or on a non rewording asset. Assets acquisition analysis According to (Baker, &…
Lending & Securities course ( Short & medium Term Commercial Financing by a lending institution in UAE )
This financial group was incorporated in 2007 in Dubai Financial Market. The company has successfully proved itself as capable of providing enhanced value added financial services across retail, corporate, investment and Islamic banking across the Gulf Corporation Council region. This organization is highly focused on its long term vision which is to become most dynamic and leading financial…