Each source of finance must function within the need of an organisation in order for it to be remarkably useful.
Any business cannot just simply function without cash. That is why it is important to understand the current state of liquidity of a certain company. There is a need to understand the level of its cash flow. Understanding this will pave way to the basic knowledge on how much money needs to be considered prior to taking into account the assurance that business will continue to function and grow.
In this paper, the proponent considers to critically assess some common sources of finance employed within different organisations and critically consider the sources of finance of Vodafone. Thus, prior to understanding the sources of finance of Vodafone, it is important to take a look at some sources of finance commonly used in most organisations.
To continue business operation, capital is indeed needed. In the case of Vodafone, capital and fixed assets are not the same since the nature of its business is much more in the offering of services. This is eventually far from categorising the capital which is also known as fixed assets if used in production (Brigham, 1992). Vodafone certainly remains focus on the essential aspects in business. After all, it is clear that a business should operate with substantial amount of cash in which it shall be invested in land, facilities, personnel, equipment and other materials for the continuation of work and investment associated with businesses and subsidiaries.
Vodafone clearly operates business through borrowing and equity which are parts of the three ways in which cash can be acquired. Mostly, firm’s reserves, disposal of assets or by borrowing are essential sources of funds. In the case of Vodafone, greater weights are clearly given to equity and borrowing. And in order to make them profitable there is a need to increase on revenue (Fess and Warren,