Managing Financial Resources And Decision Making

This step involves short and long term debt equity analysis. The proportion of equity capital depends on the possessing and additional funds will be raised. The choice of the source of funds the company has are the issue of shares and debentures, loans to be taken from banks and financial institutions and public deposits to be drawn in form of bonds. The choice will depend on relative merits and demerits of each source and period of financing. The management of the investment funds is key in allocating that the funds are going in the correct place. The profits that are made can be down in two ways dividend declaration which includes identifying the rate of dividends and retained profits in which the volume has to be decided which will depend upon expansion and diversification of the company. The management of cash is another important function. Cash is needed for all different aspects of the company such as payment of salaries, overhead and bills. All of these are important in a company and how successful the financial aspect is going to be.The financial management practices include capital structure decision, investment appraisal techniques, dividend policy, working capital management and financial performance assessment. A company needs to have well financial in order to be successful. “A company that sells well but has poor financial management can fail.” (Johnston)

Some financial decisions people struggle with the most are student loans for college and house mortgages. A tradeoff is the situation that involves losing one quality of something in return for gaining another aspect. You may face homeschooling, college, and family.

The benefits would be keeping track of the business operation and being able to fix issues or recognise successful employees.

by benchmarking, calculating the expenditure, the staff levels, the cost of resources and how much materials is needed and the actual cost and compare them with the standard and budgeted cost. Financial statements are written report which describes the financial health of an organisation. This includes an income statement and a balance sheet, and often also includes a cash-flow statement. Financial statements are compiled yearly. Cash-flow statements provide a look at the movement of cash in and out of an organisation. The cash-flow statement can be important in checking whether or not an organisation has enough cash to pay its bills, handle expenses, and acquire assets. At the bottom of a cash-flow statement, the net cash increase or decrease can be found (Dixon, 1993).

Examination of the changes of the capital structure of the company over pre-GFC and post-GFC period (2004-2010) reveals a range of considerations were deliberated in the financing decision; these include not only the capital market conditions but also the size and urgency of funding required as well as costs and availability of alternate sources of funds.

Part I deals with assessing the financial performance of the firm. For this section you need to able to understand why Clarkson Company is so short of funds despite its record of profitable operations and, in this connection, develop the distinction between profits and cash requirements. An important contribution in this part is to emphasize the dichotomy between accounting income and cash requirements.

The purpose of the report is to understand the capital structure of the chosen company on the basis of the financial statements of the company which includes the income statement, balance sheet and the cash flow statement of the company and do the capital analysis of the company as well to find out the advantages and disadvantages in working capital of the company and suggest company logical and useful ways for growing their economy.

Utilizing the monthly forecast financial statement provided by Guna Fibres, Exhibit 1, it is necessary to create a statement of cash flows to begin to assess how the company’s capital is being managed through the working capital accounts of the firm. Exhibit 2 shows the breakdown of cash flows on a monthly basis based on the forecasted information provided by Guna Fibres. There are several important insights to point to instability within Guna Fibres. The first trend that is concerning is that according to Guna Fibres forecast, they will require a positive cash flow from financing activities through the month of June 2012 just maintain operations. Certainly, if this was to be presented to the bank there would be no chance that they would be willing to extend credit as Guna Fibres will not be able to zero out the debt balance in the coming months. Examination of Exhibit 3 shows the statement of cash flows for Guna Fibres for year ending in December 2012. Note the highlighted the cell that indicates the change in short term notes payable for the year in the amount of

Balance Sheet Assets Cash Inventory Accounts Receivable Property Plant Equipment Liabilities and Shareholder’s Equity Accounts Payable Notes Payable Accrued Wages Bank Loans Bonds Common Stock Retained Earnings Total Liabilities and Shareholder’s Equity

The business is charged interest based on the amount overdrawn and the length of time overdrawn, and are usually charged a regular fee for the use of the facility.

A company needs to obtain capital for expansion into new markets and it wants to obtain these funds from external sources. The ways in which company chooses to obtain these funds depends upon the short-term versus long-term financing strategies of the company. As a finance manager for a Fortune 500 company, the plan is to borrow approximately $100 million within the next year, and the manager must present to the board the best option for this large financing. By evaluating the different types of funding options, the finance manager can make the best informed decision for this capital funding. It is ideal for a company to maximize the total value of the company and minimize the overall cost of capital (Shim, Siegel & Dauber, 2008). These decisions include whether to issue debt securities, or obtain financing from individuals and whether the funding should be secured or unsecured. Any capital structure decisions will take into account the nature of the business, strategic plan of the company, its current capital structure and its anticipated growth.

Financial management and efficient planning are important in determining the sustainability and the mission of a business. A company can know its organizational performance, financial results, and trends by using its financial statements. Conducting a ratio analysis through ratio calculation is vital. Ratios calculation is a useful tool of management because ratios are critical indicators of financial strengths and weaknesses and thus the basis of the overall situation analysis. Some of the significant financial ratios include; profitability ratios, leverage ratios, activity ratios, and liquidity ratios (Tugas & CISA, 2012). These ratios can identify financial trends for the company and can be used to make industry comparisons. Ratios

JPMorgan Chase & Co. (NYSE: JPM), one of the largest banking institutions in the United States, reported third-quarter 2015 net income of $6.8 billion, or $1.68 per share, on revenue of $23.5 billion. However, the exclusion of unusual items such as tax benefits, legal expenses, and net reserve releases depressed net income to $5.4 billion, or $1.32 per share. These results surprised analysts as the financial services company failed to thrash the consensus estimate from 29 analysts of $1.38; which led to an immediate plunge of 1.56% in the stock price.

Therefore, to start trading, the financing is most important contribute to success. However, star-up trading often have a difficult time and a long time finding sources of financing for initial

This report is to propose an appropriate capital structure for Xpresso Delight Limted’s business expansion with the minimum amount of capital as US$ 30 million. In order to achieve that goal, firstly, it is going to identify the sources of finance available for the business as debt financing which include loans, debentures and bonds; and equity financing, which includes common shares, preference shares and retained profit. It is also to discuss advantages & disadvantages of each source, as well as to assess the implications of these different sources related to risk, legal, financial and dilution of control and bankruptcy. Based on those analyses, it is to select the appropriate sources of finance for the