The Marina Restaurant was blessed with an interest from very influential people and customers even from the beginning. It usually hosts live bands apart from food and this has helped it solidify its image as the premier casual rock and roll diner. With all the success, the company has grown globally. The vast amounts of locations reflect the effective and efficient management which has led a small investment in a single cafe into an internationally recognized business expanding in just over 18 years. Marina Restaurant revenues are mainly from cafes, selling memorabilia and hotels. To ensure customers keep coming back they ensure they provide excellent value in the form of good food and entertainment. With such growth, the management has decided to open more outlets for the restaurant. However, it needs capital to start up the investment. Start-up Funding The Marina Restaurant seeks funding of $900,000 for the new venture and it will get it from three investment groups or under equity offering which entails raising capital through the issue of stock. This approach is preferred at this stage since there are no repayment schedule or debt service repayments. The shareholders will only get their returns when the company makes profits. The shareholders also have a right to vote during annual general meetings and can elect the board of directors (Owen 2003). The ordinary shareholders are the owners of the business and can receive dividends from profits. However, it is a costly process as there are floatation costs incurred and it can lead to dilution of shares held by existing shareholders. It is also risky if there are no dividends payable at year end thus shareholders end up bearing the operational risk. The investment documents will be prepared by legal firms representing each party and will not be limited to Form D Security Exchange Commission (SEC) filing, Subscriptions agreement and the Private Placement Memorandum (PPM). The subscriptions agreement reflects the terms and conditions of the investment. In other words, it is the sales contract for buying securities. Form D SEC filing notifies the commission that the company is using Regulation D program and also gives the basic information of the company. It is vital to note that this form is not an approval document but a mere notification that the company has an offering in the place. It is a violation of the security laws under the federal government to raise capital without this document. The PPM discloses all the company’s information to investors. The information maybe whether the company is raising debt or equity, the risk the investors may face and the terms of the investment( share price, maturity dates or note amounts). Financial projections Financial projections will be on the income statement, statement of financial position, statement of cash flows as well as on the financial ratios. Projections will be on years ranging from 1 to 5, and they are based on historical information already available from the company (Owen 2003). Apart from the forecast, the break-even analysis will be carried out. Break even analysis Break even analysis shows the relationship between selling prices, sales volume, variable costs, fixed costs and profits at various levels of activity. It is also referred to as cost-volume profit analysis. It used in determining the break-even point where the total revenue equals the total costs. This means that at BEP, the profits are zero. Fixed costs include rent,
Running Head: Financial Plan to Raise New Capital Financial Plan to Raise New Capital Name Institution Date Financial Plan to Raise New Capital Introduction Marina Restaurant has been in the food industry for several years. The restaurant was opened in Oklahoma in 1997 by Tom Mark and Peter Mark…
The statements may be prepared in certain future period and enable the manager fund required. ?The funds required are determined: after drawing the projections in terms of marketing activities, sale of products and the production cost, finance manager draws up a plan of the required funds depending on the time factor.
These requirements are generally met by means of short term sources of financing. Sources of short term funding Hire purchase It is an instalment credit where the hire purchaser or the hirer takes different goods on the basis of hire at a predetermined rental rate (including the principal as well as the interest amount the option of such purchase).
Cash flows allow estimating the depreciated value of assets owned by a company and further requirements to contribute in effective budgeting. Capital Asset Budgeting is also practiced commonly by corporations, which is however often criticized owing to its complexities and needs for continuous record-keeping (Oracle, 2008).
But, as scientists and economists struggle to devise ways of bringing back the lost balance, companies are finding excuses to fire excess employees and laying off its workforce at a fast pace to keep their costs low. This has led to huge unemployment in even the most developed countries let alone the underdeveloped.
Soft Capital funding is used for K-12 schools. Rollover Repayment system is also in use in Arizona. Charter schools in Arizona are having two main issues, namely duplicate operational funding and duplicate capital funding. Hence, the Building Renewal Grant Funds are
It is the responsibility of every citizen to contribute to the development of a country. This can only be done when they are healthy. The theory of human capital asserts that healthy human beings are capable of contributing towards
ase of bankruptcy, a company may have much difficulty to access financing from the traditional sources like loans and investments because the external funding sources like banks and other financial institutions often tighten their credit facilities when providing loan to the
They also tend to tarry to offer loans to this start ups businesses because they estimate that the expected returns will not compensate for the risk. (Mark, 2013).This paper tends to exploit the sources of risk
6 pages (1500 words)Research Paper
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