Implications Of Different Sources Of Finance Finance Essay

Implications Of Different Sources Of Finance Finance Essay This assignment will look at the different sources of finance that are available to a small business or a big company. With each source of finance listed the report will assess the implications that can arise and along with this the report will look at the cost to the business to taking a curtain source of finance. All businesses need short-term finance from the very beginning to start up the business and to cover day-to-day running costs. This provides the business with working capital. However businesses also need long-term capital to help them to grow and expand, and this is paid back over a number of years. Without finance a business would find it difficult to accomplish anything. For my assignment purpose I have chosen two companys they are sainsbury and tesco respectly, source of finance can be define into two ways such as internal source of finance and external source of finance. Source of Internal finace fro both company are as follows: Personal savings: This is most often an option for small businesses where the owner has some savings available to use as they wish. Practically both sainsbury and tesco depends on their savings for source of finance. Retained profit: This is profit already made that has been set aside to reinvest in the business. It could be used for new machinery, marketing and advertising, vehicles or a new IT system. Working capital: This is short-term money that is reserved for day-to-day expenses such as stationery, salaries, rent, bills and invoice payments. Sales of assets: There may be surplus fixed assets, such as buildings and machinery that could be sold to generate money for new areas. Decisions to sell items that are still used should be made carefully as it could affect capacity to deliver existing products and services. External Source of financing: Shares: Limited companies could look to sell additional shares, to new or existing shareholders, in exchange for a return on their investment. Loans: There are debenture loans, with fixed or variable interest, which are usually secured against the asset being invested in, so the loan company will have a legal shared interest in the investment. This means that the company would not be able to sell the asset without the lenders prior agreement. In addition the lender will take priority over the owners and shareholders if the business should fail and the cost will have to be repaid even if a loss is made. There are other types of loan for fixed amounts with fixed repayment schedules. These may be considered a little more flexible than debenture loans. Overdraft: A bank overdraft may be a good source of short-term finance to help a business flatten seasonal dips in cash-flow, which would not justify or need a long-term solution. The advantage here is that interest is calculated daily and an overdraft is therefore cheaper than a loan. Hire purchase: Hire purchase arrangements enable a firm to acquire an asset quickly without paying the full-price for it. The company will have exclusive use of the item for a set period of time and then have the option to either return it or buy it at a reduced price. This is often used to fund purchases of vehicles, machinery and printers. Credit from suppliers: Many invoices have payment terms of 30 days or longer. A company can take the maximum amount of time to pay and use the money in the interim period to finance other things. This method should be treated with caution to ensure that the invoice is still paid on time or else the firm might risk upsetting the supplier and jeopardise the future working relationship and terms of business. It should also be remembered that its not found money but rather a careful balancing act of cash-flow. Grants: Grants are often available from councils and other Government bodies for specific issues. For example there may be a council priority to regenerate a particular area of a town and who are happy to help fund refurbishment of buildings. Alternatively there may be an organisation that specialises in helping young entrepreneurs to launch new businesses. Assessment for grants can be very competitive, is very individual and not automatic. Venture capital: This source is most often used in the early stages of developing a new business. There may be a huge risk of failure but the potential returns may also be big. This is a high risk source as the venture capitalist will be looking for a share in the firms equity and a strong return on their investment. However the significant experience these investors have in running businesses could prove valuable to the company. This is what the TV programme Dragons Den is all about! Factoring: This involves a company outsourcing its invoicing arrangements to an external organisation. It immediately allows the company to receive money based on the value of its outstanding invoices as well as to receive payment of future invoices more quickly. It works by the firm making a sale, sending the invoice to the customer, copying the invoice to the factoring company and the factoring company paying an agreed percentage of that invoice, usually 80% within 24 hours. There are fees involved to cover credit management, administration charges, interest and credit protection charges. This must be weighed up against the benefit gained in maximising cash flow, a reduction in the time spent chasing payments and access to a more sophisticated credit control system. The downside is that customers may prefer to deal direct with the company selling the goods or services. In addition ending the relationship could be tricky as the sales ledger would have to be repurchased. Money is a scarce resource and each source has its own advantages and disadvantages. Lenders will be looking for a return on investment, the size of the risk and the flexibility with which they can get their money back when they want or need it. For the company seeking money, the decision as to the best source will ultimately depend on what the money is for, how long the money is needed for, the cost of borrowing and whether the firm can afford the repayments. Task 2: The launch of Clubcard in Thailand in August this year extends Tescos loyalty cards operation further across the globe, and belatedly brings Thailands biggest retailer into a loyalty card market which already contains offers from Carrefour, Tops and Big C. It will clearly be big: in its first three weeks Clubcard gained more members (two million) than competitor Carrefours I-Wish card has accumulated since its launch in 2007. The recent launch in Malaysia has resulted in 70% of scanned transactions being covered by Clubcard. The benefits to Tesco are clear. Their dominance of the UK market has been underpinned by Clubcard, and whilst their latest campaign to double points has yet to prove effective (Tesco growth in the period still lags Asda*, a competitor which does not use a loyalty card), there is a consensus amongst industry observers that it has historically been a critical part of their marketing mix. The benefits to manufacturers are less clear; and one suspects criticism of ones biggest customer would naturally be muted. So what are the implications for Tescos suppliers and how should they respond to Clubcard? Clubcard is a loyalty card, and is designed to encourage shoppers to use a particular chain more. In its simplest incarnation a loyalty card gives rewards, usually in the form of discounts against future purchases, based on how much is spent. Because Clubcard registers who did the shopping, it is possible for Tesco (through their partners Dunnhumby, majority-owned by Tesco), to analyze who buys what, which should enable activities such as promotions to be better targeted. So, for example, a coffee supplier could target their next promotion only at shoppers who bought the competitor product. The targeting of promotions offers a theoretical improvement in effectiveness, but the real boon is the potential to effectively evaluate activities knowing which shoppers bought adds useful data to a promotion evaluation which is currently limited to whether sales went up or not. Clubcard promises suppliers much: Insight into shoppers, more efficient promotions, and unprecedented access to new in-store media opportunities. Suppliers will need to evaluate the potential benefits of the Clubcard offer against the inevitable associated costs. Yet it clearly has limitations: Clubcard in Thailand has two million card holders, yet with Tesco enjoying 25% of the Thai retail market, their total number of shoppers must be significantly higher than this. So how skewed is the sample, how representative, and what is missing? Task 3 Choosing the Right Source of Finance A business needs to assess the different types of finance based on the following criteria: Amount of money required a large amount of money is not available through some sources and the other sources of finance may not offer enough flexibility for a smaller amount. How quickly the money is needed the longer a business can spend trying to raise the money, normally the cheaper it is. However it may need the money very quickly (say if had to pay a big wage bill which if not paid would mean the factory would close down). The business would then have to accept a higher cost. The cheapest option available the cost of finance is normally measured in terms of the extra money that needs to be paid to secure the initial amount the typical cost is the interest that has to be paid on the borrowed amount. The cheapest form of money to a business comes from its trading profits. The amount of risk involved in the reason for the cash a project which has less chance of leading to a profit is deemed more risky than one that does. Potential sources of finance (especially external sources) take this into account and may not lend money to higher risk business projects, unless there is some sort of guarantee that their money will be returned. The length of time of the requirement for finance a good entrepreneur will judge whether the finance needed is for a long-term project or short term and therefore decide what type of finance they wish to use. Short Term and Long Term Finance Short-term finance is needed to cover the day to day running of the business. It will be paid back in a short period of time, so less risky for lenders. Long-term finance tends to be spent on large projects that will pay back over a longer period of time. More risky so lenders tend to ask for some form of insurance or security if the company is unable to repay the loan. A mortgage is an example of secured long-term finance. The main types of short-term finance are: Overdraft Suppliers credit Working capital The main types of long-term finance that are available for to a business are: Mortgages Bank loans Share issue Debentures Retained profits Hire purchase Internal and External Finance Internal finance comes from the trading of the business. External finance comes from individuals or organisations that do not trade directly with the business e.g. banks. Internal finance tends to be the cheapest form of finance since a business does not need to pay interest on the money. However it may not be able to generate the sums of money the business is looking for, especially for larger uses of finance. Examples of internal finance are: Day to day cash from sales to customers. Money loaned from trade suppliers through extended credit. Reductions in the amount of stock held by the business. Disposal (sale) of any surplus assets no longer needed (e.g. selling a company car). Examples of external finance are: An overdraft from the bank. A loan from a bank or building society. The sale of new shares through a share issue. Task 4 All lenders charge interest on their loans and this is the major element in the cost of the finance. Building societies and banks have variable interest rates which may vary according to the size of the loan. However, there are other charges that are normally involved in arraning a mortgage: Arrangement fees Banks and building societies do not always charge arrangement or setup fees, but many lenders do charge them, particularly for some of the specialist mortgages described later in this guide. Arrangement fees are typically in the range of  £100  £400. Valuers report In order to protect its security, the lender will want to be sure that the house is worth the sale price, so will alwas insist on a valuation for mortgage purposes. This will be carried out by a qualified surveyor, who will charge a survey fee, paid by the borrower. The lenders survey aims to establish if the value of the house is enough to protect the lenders security. It does not mean that the property is free from any defects. It is therefore recommended that house buyers obtain a homebuyers report or a full survey to ensure that they are aware of any problems. This will increase the cost but could prove to be a wise investment. Indemnity guarantee fee Some lenders insist on an indemnity guarantee policy if the loan exceeds 75 percent of the property value. This protects the lender in the event of the borrower defaulting on the mortgage and the sale price of the property not being enough to repay the loan. However, this policy is paid for by the borrower and often, the premium has to be added to the loan. In recent times, the threshold for mortgage indemnity guarantees has increased many lenders now set the level at 90 percent. Stamp duty This is a tax charged by the Government on the document transferring ownership of the house, paid by the purchaser. The rates are: Nil up to  £60,000 1% over  £60,000 but not more than  £250,000 3% over  £250,000 but not more than  £500,000 4% over  £500,000 Legal fees There will be legal fees payable to the solicitor or licensed conveyancer handling the transaction. The legal fees will include the local search fees (carried out to reveal matters affecting theproperty) and land registry fees, as well as the lawyers own charges. Other charges All mortgage lenders will have a tariff of other charges that you may incur in certain circumstances at various points during the life of your loan. These are not universal charges lenders will vary in terms of which ones apply, but all should be able to provide details on request. Task 5: Importance of Financial Planning It is important to plan finances in order to reap long term benefits through the assets in hand. The investments that one makes are structured properly and managed by professionals through financial planning. Every decision regarding our finances can be monitored if a proper plan is devised in advance. The following points explain why financial planning is important. Cash Flow: Financial planning helps in increasing cash flow as well as monitoring the spending pattern. The cash flow is increased by undertaking measures such as tax planning, prudent spending and careful budgeting. Capital: A strong capital base can be built with the help of efficient financial planning. Thus, one can think about investments and thereby improve his financial position. Income: It is possible to manage income effectively through planning. Managing income helps in segregating it into tax payments, other monthly expenditures and savings. Family Security: Financial planning is necessary from the point of view of family security. The various policies available in the market serve the purpose of financially securing the family. Investment: A proper financial plan that considers the income and expenditure of a person, helps in choosing the right investment policy. It enables the person to reach the set goals. Standard of Living: The savings created by through planning, come to the rescue in difficult times. Death of the bread winner in a family, affects the standard of living to a great extent. A proper financial plan acts as a guard in such situations and enables the family to survive hard times. Financial Understanding: The financial planning process helps gain an understanding about the current financial position. Adjustments in an investment plan or evaluating a retirement scheme becomes easy for an individual with financial understanding. Assets: A nice cushion in the form of assets is what many of us desire for. But many assets come with liabilities attached. Thus, it becomes important to determine the true value of an asset. The knowledge of settling or canceling the liabilities, comes with the understanding of our finances. The overall process helps us build assets that dont become a burden in the future. Savings: It is good to have investments with high liquidity. These investments, owing to their liquidity, can be utilized in times of emergency and for educational purposes. The argument made by people from low income groups is that they dont need to plan their finances due to the less money they possess. However, no matter how much one earns, better planning of income always helps in the long run. Task 6: Defining the problem Take time to properly define the problem. What is the issue to be covered? What is the problem? What decisions need to be taken? A fish-bone diagram will sometimes help in understanding the complex interlinkages that create a particular problem. For each of the causes or its effects, make a list of information or data that will be required, and clarify how that information will lead to a better decision. Finding the information Determine the sources from where information needed for decision-making can be obtained. What information needs to be taken? Who has that information? Why is that information being collected by the source? Which component of the problem at hand will it help? Evaluate the sources to see which of them can provide the best information, and identify the mode and format in which the information is presented. Keep in mind that different sources provide information in different formats (for different reasons!). Processing the Knowledge This where the information gathered is matched with the problem in hand. The relevant information from each source is extracted and information from multiple sources is organized. Which parts of the information collected needs to be used? What additional data or information is needed? How can information be best presented to be able to understand the situation and take decisions? The collected information is evaluated and integrated for its relevance, validity and interconnectedness. Taking the decision In an interactive and inclusive process involving all the concerned parties, form an opinion from the information collected for its effectiveness and efficiency. Use it to take the decision. Has the decision taken help in solving the problem at hand? Was the decision satisfactory and took into account all the views of concerned parties? A decision taken may need to be examined closely and refined, and modified to meet differing needs over time. Task 7 Impact of finance of financial statement is immence because inorder to prepare financial statememnt some cost is essential such as auditors fee, financial analysts fee.

market trends :: essays research papers

GDP and Market Trends   Ã‚  Ã‚  Ã‚  Ã‚  The current prospects of the gross domestic product are encouraging. GDP is on the rise at a staggering rate. As stated by the commerce department â€Å"economic growth surged in the first quarter at its fastest pace in more then two years.† GDP has been on a comeback with a vengeance, coming in at a 5.8 annual percent a full point higher then expected economic analyst are enthusiastic of the rest of the year.   Ã‚  Ã‚  Ã‚  Ã‚  Corporate America is also enjoying the boost in the economy with 86% of the S&P 500 companies coming in even or above wall streets forecast for the first quarter.   Ã‚  Ã‚  Ã‚  Ã‚  Although economic growth is surging it is not expected to keep at its current pace. In one strategist’s opinion (Ned Riley) â€Å" In the short term the market should flourish, then very sluggish economic progress.† Regardless of the speed of the expansion, it is all but inevitable throughout 2002. With this rapid expansion comes the chance of a double dip, sliding back into a recession, but according to James Cooper and Kathleen Madigan, writers for Business Week, write â€Å"that there is no danger of a second recession.†   Ã‚  Ã‚  Ã‚  Ã‚  With GDP on the rise, the surging economic activity, the FED lowering interest rates, and charts of the business and economic cycles I believe that we are on the upside of the recession and coming out strong. With the factors that are in place the market markets rise should slow but it will continue. Economic Factors, Indicators and Forcast   Ã‚  Ã‚  Ã‚  Ã‚  Interest rates have been dropped to historically low levels to help bring the economy out of recession, and is having a great impact on the economy as a whole. With lowered in interest more people will be taking out loans and spending money they would not have with the previous interest rates. This puts a boost in the economy by putting in extra money, which people will then spend on goods and services with becomes income for others which then leads to more demand for products, then more manufacturing, and eventually the whole economy is lifted from lower interest rates†¦ or at least this is the plan.   Ã‚  Ã‚  Ã‚  Ã‚  All of these indicators say to me that the economy is coming out of the recession with strong force, and it may not continue its current speed of expansion but I believe that unless there is an extreme event the economy should continue to recover and grow at a normal rate.

English Poetry

Emersonâ€Å"The Echoing Green† and â€Å"The Eolian Harp† â€Å"The Echoing Green† is a poem written by William Blake. It was taken from Blake’s Songs of Innocence, and is also a pictorial poem of Blake’s. In this poem, the poet describes a happy country side view where the arrival of spring is welcomed by sunny skies, and ringing bells. It takes place on an ideal day in the British Isles. Blake uses the theme of innocence and peace throughout the poem. The theme plays out here when Blake states that the skies are happy, the children are playing, and the ’old folk’ who reminisce about their own childhood.This poem is a symbolic and draws a contrast between youth and old age. The spring symbolizes the youth and the children. Morning is the beginning of life and dark evening is the end. The poet symbolizes the innocence of children with birds. The birds are happy and they sing; mocking the children. ’Nest of birds’ symboli zes peace. The poem could be attributed to the life of a person-birth, life, death. Birth being the morning, life being the kids playing, the routines throughout the day, and men reminiscing, and lastly death being the end of the day when all goes dark, and quiet smothers the earth. The Eolian Harp†, is a poem written by Samuel Taylor Coleridge. Inspired by the peaceful music being played by wind this poem was written for his wife, Sara, while visiting a house of his in Clevedon, Somersetshire. The theme in this poem is also peace, as well as innoncence. Peace comes to him while he ponders on the beauty of nature, and the wonder of God giving him everything around him including Sara. Coleridge personifies nature by comparing it to abstract nouns. For example, the white flower represents innocence.This abstract noun does exactly this: it gives life and character to nature. Coleridge uses unperceived nature to appeal to the human senses. Each are introduce in turn starting with sight through the watching of the clouds and the evening star. The introduction of God towards the end is another vision. ; a vision to the soul. It is now that the audience visualizes the peace that Coleridge feels. The allusion to sight and vision in these poems are significant because of the dept of imagination needed for physical and emotional imagery. It’s full of emotional feelings, as well as physical sight.The audience is needed to picture, and feel what the poet did to understand the poem. For example, both Coleridge and Blake set the poem outside, in nature to show the peace and innocence. These two poems also have central connectedness. They both have vision and sight. Not only emotionally and mentally, but physical as well. There are many times where both poets use deep feelings and thoughts. Hiding meaning behind words, and using polsemes. Blake hides meanings behind his entire poem. Such as: morning being the beginning of life, and evening being the end. English Poetry In ‘Bayonet charge’ and ‘Belfast confetti’ the consequences of war are presented as inhumane, devastating and confusing by the poets. In both poems a range of semantic fields are used to display the confusion of the soldier in ‘Bayonet charge’ and the civilian in ‘Belfast confetti’. For example in ‘Belfast confetti’: â€Å"Nuts, bolts, nails, car-keys. A fount of broken type. And the explosion. Itself – an asterisk on the map. This hyphenated line, a burst of rapid fire†¦Ã¢â‚¬  Several semantic fields are used at once.For instance â€Å"nuts, bolts, nails and car keys† belong to a semantic field of household objects, whilst â€Å"asterisk† and â€Å"hyphenated line† would fit in to a semantic field of punctuation and â€Å"explosion† and â€Å"rapid fire† are part of wars semantic field. This use of variation in semantic fields creates a sense of confusion as the words do not fit in with the scene Carson is trying to paint, much like the civilian does not fit in with the war that is raging on around him. Similarly Hughes also uses the semantic field of nature as metaphors to create confusion: Stumbling across a field of clods towards a green hedge† â€Å"Clods† are something used to describe mud or soil in a field. Here Hughes are using them as a metaphor for the people who had fallen during the charge. This metaphor shows how disorientated the soldier is, â€Å"stumbling† around the field oblivious to what he was walking through. However the poet makes the soldiers ignorance sound as if it was forced, that in order to make it through the battle he had to ignore what was happening to his comrades.The metaphor â€Å"field of clods† also shows the inhumanity applied to warfare, making the soldiers appear as nothing more than pieces of earth not human beings who had lives and families. It also shows how devastating the battle s were, as an entire field has been covered with the remains of those fighting. â€Å"Green hedge†, another metaphor used in the quotation I have chosen, used to describe the end of the soldiers time on the battlefield. I felt that this was particularly powerful as the colour green and nature, in general, are used to represent life and hope, something which would seem out f place in a battlefield meaning that the metaphor also serves as an oxymoron. Both poems consist of many enjambments. Structuring the poem in such a way causes the poems to gain a stop, start rhythm. I felt that this made them sound like the train of thought coming from the subject of each poem. Often cutting off and continuing or switching points completely much like a person in a state of confusion unable to focus solely on one thing before finding more questions to ask to attempt to ease their confused state.By setting the poems out this way both Carson and Hughes allow the reader to be enveloped in the same state of confusion creating empathy between the reader and the subject. Hughes uses mechanical imagery in order to show the inhumane consequences of war: â€Å"Sweating like molten iron from the centre of his chest† The use of the simile â€Å"Molten iron† makes the soldier sound mechanical and inhumane as it appears to be coming from within the â€Å"centre of his chest†.This suggests that the poet believes that war and conflict devastates a persons humanity, becoming nothing more than a weapon. This also adds to the effect of the verb â€Å"Sweating† showing us that despite how inhumane the soldier may be, he is still scared enough to be â€Å"Sweating† conveying his fear to the reader. Meanwhile Carson explores the devastating effect war has on the land it takes place on: â€Å"I know this labyrinth so well† The contrast within the quotation displays how much the area has been ruined.The phrase â€Å"So well† emphasises the de gree to which the subject knows the area he is talking about, the personal address term â€Å"I know† also creates a sense of desperation and longing for the town this person had once known but would now have to use a map to find the right road. â€Å"Labyrinth†, more likely to be found in Greek mythology, describes a maze almost impossible to escape or find your way around. Here this metaphor displays the extent of the damage done to the town.So devastated and unrecognisable that a person who, presumably, had lived there most of their lives could get lost. Overall the poets use metaphors and enjambments to allow the reader to empathise with the subjects of the poems allowing us to see how the consequences of war would have affected them. I personally found Carsons use of contrast and reference to Greek mythology particularly evocative, letting us see the scale of devastation caused by war.

Shakespeares Presentation of the Female Character in the...

Shakespeares Presentation of the Female Character in the Taming of the Shrew Shakespeare’s Taming of the Shrew explores the role of women in Elizabethan times. Shakespeare uses many themes and imagery in the play and this essay intends to explore how Shakespeare presents the female character in the Taming of the Shrew. The Elizabethans believed that a peaceful and tamed house wife was a good wife. This view is supported by The goodie and the Baddie an Elizabethan text giving advice on how to be a good wife. â€Å"†¦she is a comfort of calamity†¦she is her husbands down bed†¦a saint in her heart†¦Ã¢â‚¬  Shakespeare in the Taming of the Shrew uses the idea of good and bad wife with Kate and Bianca.†¦show more content†¦She is purely there to look pretty and keep and orderly home. â€Å"†¦being a winner good night†¦Ã¢â‚¬  Petruchio showing that he has tamed Kate retires from the scene. Petruchio’s use of winner can mean a few things. The use of winner shows that the male society in Elizabethan believed that they would always domineer over women. Even though it might seem like Petruchio has won over Kate there is evidence that it may not be all of Petruchio’s doing that has tamed Kate, for Kate herself may have conformed Kate’s view has become radically changed from her previous actions, however she could be acting and have surrendered to the pressure of a male dominated society. Even though she does say â€Å"†¦to bandy words for words and frown for frown...† admitting that she use to be like every other bad wife her last speech maybe to please husband Petruchio, due to one sentence in her last speech that mirrors a view earlier said by Petruchio â€Å"†¦and craves no other tribute at thy hands but love fair looks and true obedience†¦Ã¢â‚¬  while in act 4 Petruchio says â€Å"†¦that bate and beat and will not be obedient†¦Ã¢â‚¬  Kate’s view on how men should be treated byShow MoreRelated William Shakespeares The Taming of the Shrew Essay3149 Words   |  13 PagesWilliam Shakespeares The Taming of the Shrew Over the past 400 or so years since Shakespeare wrote _The Taming of the Shrew_, many writers, painters, musicians and directors have adapted and reformed this play of control and subjugation into timeless pieces of art. In _10 Things I Hate About You_ and Kiss Me Kate from two very different times in the twentieth century, and paintings of Katherina and Bianca from the late nineteenth century, the creators of these adaptations have chosen to focusRead MoreEssay on Taming of the Shrew677 Words   |  3 PagesA principal theme throughout Shakespeares Taming of the Shrew is the battle of the sexes. The battle primarily focuses on the relationship between Petruchio and Katherine, otherwise known as Kate. They each struggle for supremacy in a classic confrontation between male and female until Kate succumbs to Petruchios dominance for the first time during Act IV, Scene V when she states What you will have it named, even that it is. And so it shall be so for Katherine. In this first act of deferenceRead More The Significance of Gender Roles in Shakespeares The Taming of the Shrew and Lorraine Hansberrys A Raisin in the Sun2574 Words   |  11 Pageswrote in radically different time periods, William Shakespeare and Lorraine Hansberry, wrote plays that pose a threat to expected and traditional gender roles. The Taming of the Shrew (1623) is an example of an earlier work, which involves characters that manage to defeat their expected roles by acting out of the ordinary. A shrew, which is literally defined as either a small rodent-like animal or a woman with a harsh and nagging temperament (American Heritage Dictionary 1285), is used in reference