Sources of finance essay

Econometrics Economics Finance Macroeconomics Political Economy Abstract This dissertation consists of three essays which analyze the role of household debt in the financial crisis ofand weak recovery that followed.

Sources of finance essay

Primary vs. secondary sources

Formulate contractual terms between your company and other organization. Cuurent debt equity ratio vital in raising finance Financial statements of other companies provides the appropriate guidelines foro channeling resources.

Use for collective bargaining agreements. Discussing promotion, rankings and salary hike. External users - any stakeholders or general public outside the organization. Institutional Investors Assess the financial strength of your company.

A long-term lender will always want to know the gearing ratio of a company while Sources of finance essay short-term lender will want to know about the liquidity ratio of the business Financial Institutions.

Raising finance, like in your situation to raise a loan you would need tp produce the F. Government Investigation of tax payment and validity of profit declared.

Sources of finance essay

Genereral Mass and Media Impact of finance on Financial Statements Ordinary shares and preference shares - Increases the value of equity capital in the balance sheet. If the issued shares market price is greater than the nominal value of the share then share premiumis also increased in the balance sheet.

The number of shares issued is alsodisplayed in the balance sheet and for preference shares the rate ofdividend is also shown. The dividends paid to the shareholders are recorded in the appropriation account after tax is deducted from net profit. Debentures - Debt capital The value of debenturesalong with the rate of interest and the repayment date is presented in theequity and liabilities section of the balance sheet.

The interest paid on debentures is reduced from profits before tax is charged.

Sources of Finance - Free Accounting Essay - Essay UK

Bank overdraft - This appears in the balance sheet as a current liability since it is ashort-term debt and has to be paid back within a year. The interestcharges and bank overdraft fee if charged are deducted from the profitand loss account before tax is charged.

Loan - Loans are long-term debts and therefore come under long-termliabilities in a balance sheet.

Sources of finance essay

The loan when displayed on a balance sheetwill usually contain information about the repayment date and theinterest charged on the loan. The interest is charged in the profit and loss account. Policies and procedures 1.

The going concern concept: The concept of prudence: The financial statement shoud be reliable, understandable,comparable and relevant. Any events after balance sheet date should in the notes and if any mistake or error is found before issuing the F. Disclosing any facts that can impair the interpretation of F.

Financial decisions Plz refer to worksheet in the appendix Analysis of budget and decision making Calculating unit cost and making pricing decision Viability if investment appraisal techniques. Financial performance Purpose of financial statements Financial statements are formal presentations of the flow of money into, through and out of a business Each statement is part of the framework for financial statements.

Balance sheets are based on a fix point called a reporting period Income statements show the revenue earned during a reporting period. Included in this report are the expenses and cost of creating the revenue.

Once the expenses and costs are removed from the total revenue, the bottom line of the report reveals whether or not the company lost money or made money Cash flow statements track the inflow and outflow of cash. They reveal whether or not cash was generated by the business. The data for a cash flow statement comes from an income statement and the balance sheet.

The cash flow statement reveals net decreases or increases of cash for the reporting period. Retained earnings are broken down and explained in the statement of retained earnings. This statement reveals what the company keeps and does not distribute to the owners and how that amount changes over the reporting period.Sample Essay.

Word length approx: words. 3 works cited. Every business needs finance to run on a daily basis. There are many expenses to be paid for and the inflow of cash into the business needs to be more than the cash outflow in order for the business to make a profit. Reinvested profits are the most commonly used source of finance for businesses.

Give 2 reasons why shareholders would approve and disappove of reinvesting profits. sources of finance (LO , ) Assess the implication of the different sources identified above (LO ) Get professional help with your research essay paper today from our student essay service.

Sources of Finance Essay Sample. For the following items below, decide which form of external finance is suitable and why?

(You may have to decide between more than one, evaluate the best solution). Sources of Finance. Finance is essential for a business’s, development and expansion. Finance is the core factor for most businesses and therefore it is crucial for businesses tomanage and maintain their financial resources better.

Basic citations are in plain text; red text indicates information you add if an online source. Note #1: For online sources, ALWAYS include the name of library database (OR .

Journal of Financial Economics - Elsevier