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 funds through the issuance of new shares of stocks. If a company is unquoted, it simply has to obtain a Stock Exchange quotation to be able to issue shares of stocks to raise funds for the operation of the business (Macdonald and Cheng 1997). d. Financial leases Finance leases are lease agreements between the user of the leased asset (the lessee) and a provider of finance (the lessor) during the leased asset’s useful life (Macdonald and Cheng 1997). This arrangement is usually resorted to in obtaining fixed assets whereby a creditor agrees to act as the lessor by purchasing the asset and lease it to a company. The company will then use the asset and make regular payments to the creditor under the team of the lease (Macdonald and Cheng 1997). II. ...Show more
Introduction to Accounts: Financing the Short-term Obligations of the Business Name Class Professor Date Introduction to Accounts: Financing the Short-term Obligations of the Business I. Source of finances for meeting short term obligations Sourcing of funds either to start up a business, to expand its operation or to settle its obligation is not limited to capital paid up by its owners…
This research is being carried out to evaluate and present sources of short-term finance. This research is the best example of comparison of working capital performance. The following paper also gives an overview of the liquidity ratio and efficiency ratio, in particular, of debtor days; creditor days and stock turnover days.
The short-term finance refers to that finance which is obtained for a shorter period of time, generally for a period of less than one year. After obtaining the short-term finance, the companies make use of it in either raising working capital for the business or financing other areas of the business.
The methodology provides a description about four short term finance sources availed by the businesses. Each one is separately described. Subsequent to that, the liquidity and efficiency ratios of Sainsbury and Tesco have been computed and compared. Four different sources of short term finance Short term finances fulfil the day-to-day operations of business.
This report has been developed as a financial training tutorial for medium enterprises in the local area. Therefore, main objective of this report is to make the participants clear understand about one of the most important areas business finance i.e. source of finance.
Capital assets are properties own by the Company whose useful life is greater than one year, and are likely to earn sufficient income to cover the operating expenses and amortized acquisition cost associated with it (Baker, & Powell, 2005). Land, buildings, facilities, equipment, machinery, and vehicles are examples of assets.
Alternatively, the financial planning helps corporations to estimate asset investment requirements in order to achieve long term objectives. Financial planning activity starts from the analysis of business environment and feasibility of business model. Then it identifies the sources needed to achieve these objectives in monetary units by quantifying scarce resources such as raw materials for production process, labor, necessary equipments, inventory, and so on.
The different type of financing options available for the company is debt financing and equity financing. In debt financing, the company can acquire loan through bank, commercial paper, creditors and bond issuance. On the other hand, in equity financing, the company can obtain funds by issuing shares publicly both common and preferred.
Commercial banks typically offer straight term loans to credit lines that would be used in the various operation of the business (Raiborn 2010).
Retained earnings are profits that have been retained within the business for use in the
An operating budget should be ready for an annual operational cycle. Types of operating budgets include; the sales budget, production budget, labour budget. Capital budgets in a company use up a lot of money in catering for
1 pages (250 words)Assignment
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