Business

692 Words Jan 5th, 2014 3 Pages
Astion Bhd. has a well financial control by they have prepare a huge amount of retain earning for future use. The company is not facing any financial problem in this moment. So we suggest some way for generating fund when this company running project which is over the amount of company retains earning. Those ways can different into 2 categories which are short term sources of finance and long term sources of finance. The first short term source of finance is debt factoring. Debt factoring a factoring company takes responsibility for collecting money relating to business’s invoices, and immediately pays that business part of the total amount owed on the invoices. End of the year of financial, the company Astion bhd. has RM 87665082 or …show more content…
Astion can choose to leasing land, building and huge equipment instead direct buying the asset. It is suitable to Astion when want to installing new equipment for upgrade purpose or enhancing. The advantages of finance lease are company can preserve the cash to use in other way. It is tax deductable which the money will be record in expenses of the company. Avoiding risk of finance lease is can’t be cancel by the lenders and repayment is fixed so that it gives the company certainty. Other than that it is easy to access and less paper work compare to hire purchase. Besides become the lessee, Astion can become lessor which to purchase the assets to lessee. The company can get the interest from the lessee, so that Astion can get a fix amount of payment from lessee. It also is secured which the agreement can’t be canceled by the lessee. Second long term source of finance is warrants. Warrant is a type of long term call option which to purchase a fixed number of shares of common stock at a predetermined price during a specified time period. Astion can use warrant in case of they may have a new project in future which it will use a huge number of money. By using warrant when the time is coming to that project the company already have the amount of money. The advantage of using this warrant is warrant no involves the payment of interest and dividend. The company wishes to raise equity finance in future. It also makes the stock more

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