Companies, firms and businesses raise funds through various available sources to meet their needs of cash to finance their business expenditures and running operations. These sources are broadly categorized into debt capital and equity capital that are further divided into short…
This type of financing is known as Debt financing.
Businesses also raise funds by offering their stocks or shares to different financial institutions including banks and insurance firms, governments and general public at a defined ‘Par or Stated’ value with or without a premium depending upon the market prices. A firm can issue a maximum number of shares that are known as Authorized shares and can’t exceed that limit. Shares issued are known as Outstanding shares. Dividends are paid to shareholders who have owned the shares.
Short term loans can be either ‘secured’ that means that specific assets such as inventory are pledged as collateral or they can be unsecured that means the firm has not promised any assets as collateral. These loans are usually acquired from different financial institutions such as commercial banks, insurance companies or from financial groups such as private investors, individuals with savings and small/medium banking institutions at relatively higher interest rate to meet their current needs of finance.
A commercial paper is an unsecured debt (in other words a ‘promissory note’) taken by businesses to finance the inventory purchases and various short-term liabilities such as wages, rent, fuel etc. Undoubtedly, they mature in less than 9 months or 270 days and have a lower interest rate than what a bank normally charges from its clients. Only the large businesses with extensive financial resources, strength and power are able to sell commercial papers compared to small and medium scale enterprises, which do not enjoy extensive capital resources.
Sales of stocks and bonds are a major source of finance for public limited companies, multinationals and large scale corporations. The sale of shares results in cash inflows for the issuing firm and the buyer receives an ownership in that firm. Whereas, the sale of bonds receives an interest payment (calculated through the interest rate) along with the ...
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(Financial Business Essay Example | Topics and Well Written Essays - 1500 Words)
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Financial crimes occur in businesses when any kind of falsification takes place in the accounting measures. This is generally carried out intentionally by the financial management team of a company for the purpose of convincing others with financial results that are false, thereby increasing the value of the company in the industry.
Such crimes may include basic company frauds, falsified claims of travel or entertainment, cheque fraud, identity fraud, misappropriation, computer related crimes, or financial statements frauds (Pickett & Pickett, 2002, pp.1-6). Earnings management is one of the popular measures of financial business crimes occurring in companies on a habitual basis.
These statements include four primary reports: profit and loss statements, the balance sheet, statements of equity changes and statements of cash flow (Harrington, 2003). However, a vast majority of massive corporations have complex statements, which include vast sets of notes of financial reports and explanations of financial policies.
The business analysts who are majorly responsible for the assessment develop this model that will be used to establish the principles that govern the analysis of investment opportunities that happen within the choice security and the investment instrument.
A firm incorporates operating leverage in its operation when it invests more into fixed assets. A Firm exposes itself to financial risk with the introduction of debt in its capital structure. When the organization raises debts, the risk will concentrate to stockholders and they will ask for higher return to bear that risk.
It is because majority of these providers are relying much on the difference between monetary exchanges and with this, the higher the difference is, the higher their profits. However, there are also factors which affect and contribute in relation with the intangibility of certain asset, particularly, a financial product.
Additional budget was allocated in the succeeding months for the possibility of adding up the manpower in anticipation of an added number of clientele base and accounts.
The company will rely heavily on non-traditional advertising, which is through word-of-mouth and the use of
For the past many years the company has been considered a synonym for unmatched quality and unmatchable service. The company is considered to be one of the UK’s leading retailers with the customer base of
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