This website uses cookies to ensure you have the best experience. Learn more

Business Finanace Essay

926 words - 4 pages

Finance

Finance refers to the funds required to carry out the activities of a business. It is a crucial issue when an entrepreneur is identifying a business opportunity, especially due to the fact that finance is often difficult to obtain.

Sources of finance:
Finance is available from a variety of sources, but there are two main types of sources available to a business, those being debt and share holders’ equity. To put it simply, the business can either add their own funds (capital or equity), which is an internal source of funds; the business can also obtain loans (debt) from external sources.

- Debt Finance: This is finance obtain through loans. The main advantage with debt ...view middle of the document...

There are three ways to gain equity finance, those being; taking on a partner, or another partner, seeking funds from an investor (future shareholder) or selling off any unproductive asset.

* In relation to my business, we will need to source finance from a number of debts, consisting of short, medium and long term financing, in order to pay the costs involved with establishing and operating the business. The establishment costs that were involved when beginning my business included purchasing our building, equipment (cash registers, computers etc), fixtures and fittings, legal fees, furnishing, connections costs (phone, electricity) and our company car; to pay for the initial deposit on the buildings rent ($8500), fixtures, fittings furnishing ($125 000) and legal fees ($10 000), I took out a bank loan (medium term), and the connection costs ($850) and equipment ($3000) and vehicle ($5 500) I payed using my own money (equity). For the operating costs, this includes wages, rent, electricity, stationary, advertising and insurance, I generally use retained profit or equity, but I also have an overdraft facility, from which I can draw funds from during cash shortages. Any money left over (retained profits) and my own money (equity) I will use to employ strategies and to grow, fund and develop my business.

Cost of finance:
The cost of finance will depend on the following; the types of finance, the source of finance and the term. The type of finance used by a business will influence the cost of capital; for example debt financing requires the use of money form an external source (like bank, finance company ect), and involves interest (cost of borrowing) which is charged by the institution.

If equity finance is a businesses way of raising capital, no interest is charged, for the money has been invested by the...

Other Essays Like Business Finanace

The Versatility And Flexibility Of OLED's

1014 words - 5 pages In April 1, 2002, organic light emitting diodes gain rise in the scientific community with their published, more practical form at Ames Laboratory. “Scientists at the U.S. Department of Energy's Ames Laboratory, in collaboration with scientists at the University of Michigan, Ann Arbor, have developed and demonstrated a novel, fluorescence-based chemical sensor that is more compact, versatile and less expensive than existing technology of its

Comparing The Moral Virtues Of Antony And Julian The Apostate

1103 words - 5 pages Roman emperor Julian the Apostate and Christian leader Antony both exhibited many qualities of character during their existence. Both of them led very distinctive lives although shared several ethical values. Book 25 of “The Later Roman Empire” and the book “Early Christian Lives” show concrete evidence of this. In the following essay, I will argue how both leaders’ lives were devoted to their religious beliefs and their mutual cardinal virtues

Living In A Cashless Society

1637 words - 7 pages question we might ask ourselves is what is a cashless society? What are the implications of living in a cashless world? To begin with, a cashless society could be regarded as a world where all bills and debits are paid for with the use of electronic money such as bank and credit cards, direct debits, and online payment. (Business Defintion for: Cashless Society, 2009). Looking back to history, we could see that our ancestors once lived in a cashless

The French And Indian War: The "Real" First World War

1955 words - 8 pages The Seven Years War, or more commonly referred to as “The French and Indian War”, has been called the true First World War. In this book The French and Indian War: Deciding the Fate of North America, the author and historian Walter R. Borneman paints a detailed and elaborate picture that justifies the claim of it being the first true war of global proportions. If ever there truly was a climax to the never ending feud of the European powers

Is The Use Of Animals In Medical Research A Necessary Measure?

1513 words - 7 pages Throughout history, animals have been used in experiments to test product safety and obtain medical knowledge that benefits both humans and animals alike. Every year there are numerous medical breakthroughs, such as medications and surgical instruments, which are tested on animals to insure their safety before they are deemed acceptable for human use. Even though the results of the experiments saved millions of human lives, they are also

Education And The Evolving Job Market

2363 words - 10 pages The lives of students today are changing. They are preparing for lives and jobs that have never before existed. If teachers hope to have a significant and worthwhile impact on these quickly changing lives, they must change the way they think, prepare, and instruct our future generations. Children cannot afford to have teachers who remain stagnant in their methods and ideals. Students crave instructors that are willing to allow them to tap

Young And Relentless

1737 words - 7 pages different types of alcohol brands and they all love business. They do not care about who is drinking their product, as long as they are receiving profits they could care less who is drinking it. In addition, a Bacardi advertisement includes different types of drinks you can make with their product, making it much easier to entice people to buy their product because it sounds more enticing to the consumer. When an alcohol commercial first starts, the

The Natural Law Theory

1231 words - 5 pages Obeying by the natural law theory is the only true and moral way to live life; especially a life lived in God’s image. God’s presence is a guiding factor to obtaining a moral and virtuous life, which can only be obtained by following the natural law theory. God created a set of laws as a supreme guide for humans to live life, like any law these laws were created to ensure wellbeing for everyone. The laws he created are the civil law, the natural

Resolved: Presidential Signing Statements Threaten To Undermine The Rule Of Law And The Separation Of Powers

1811 words - 8 pages The subject of signing statements has created much debate among the houses of Congress, government officials, and the public alike. These signing statements fall under the categories of constitutional and legislative history signing statements. Constitutional signing statements are those in which the president deems certain provisions of the legislation as unconstitutional, therefore they should not be enforced (Bradley & Posner, 2006

Oppressive Systems Of Government In Egypt And Animal Farm

1529 words - 7 pages As in Egypt, Orwell demonstrates through his allegorical novel “Animal Farm” that leaders are able to establish and maintain power over a people, and in turn create an oppressive and corrupt government system. Orwell shows the significant difference in the education and levels of knowledge in the animals, and how the government takes advantage of this difference. The split between the levels of intelligence is portrayed in the first chapter when

The Pathway To Psychosis

1415 words - 6 pages “How all occasions do inform against me” is a line from act IIII, scene IIII of William Shakespeare’s Hamlet. This line, spoken by Hamlet, expresses his emotional state as he is currently overwhelmed by the death of his father, the king of Denmark, and the situation surrounding it. After Hamlet learns of his father’s death he finds out that his mother has married Claudius, Hamlet’s uncle. On top of all of that, Hamlet soon after

Related Papers

Financial Ratios Analysis And Comparison Paper

1481 words - 6 pages success of healthcare business. Financial ratio analysis refers to an effective financial management tool that helps in understanding financial performance of the hospital over a period of time. Financial ratio informs about the financial trends and information on key performance indicators that helped in strategy making. Financial ratios can also utilize in comparing business performance of two or more hospitals, and also to assess effectiveness

Genrays Project Charter Essay

1601 words - 7 pages Project Charter HRIS System Project Charter GenRays Date: 6/29/2016 Contents Project Title 3 Problem/Opportunity Statement 3 Description 3 Objective 3 Success Criteria or Expected Benefits 4 Funding 5 Project Process Outcomes 5 Phase 1. Initiate, plan and research 5 Initiation of Project and initial planning 5 Business analysis 5 Infrastructure Preparation 5 Phase 2. Design and develop 5 Phase 3. End user

M&S Case Study

2629 words - 11 pages which they know size etc of as they always shop there. asian fit bra! opportunities on the back of franchising to drive international business. Increase number of Simply Food stores Home business strategy - giving different dimension. Reconsider international aspirations? Separate loyalty card Important is to get priorities right - concentrate on UK markets first. alot more miledge in existing business. competition didnt lead to fail

The Separation Of Capital Ownership And Control

1577 words - 7 pages monitoring and asymmetric information. Managers run business on a daily basis and then as a consequence, have a more comprehensive view of the business while owners get information only based on annual reports or data provided by managers. In this case, there is no rational reason to expect managers will act as they promised. By contrast, there is another theory citing that the separation of ownership from control can be efficient, which is