Sourcefinanceppt.final[1]
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This document summarizes various sources of finance for businesses, including both internal and external sources. Internally, businesses can use retained profits from sales or sell assets to fund organic growth. Externally, short-term financing includes bank loans, overdraft facilities, and trade credit. Long-term external financing includes shares (ordinary and preference), debentures, bank loans, and venture capital or business angels. Mergers and acquisitions also allow for inorganic growth through external financing such as secured loans.
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Sourcefinance
There are internal and external sources of finance available for business growth. Internal sources include reinvesting profits and selling assets. External long-term sources are shares (ordinary and preference) and long-term loans such as debentures, while short-term sources include overdrafts, trade credit, factoring, and leasing. External sources also allow for inorganic growth through mergers and acquisitions requiring large amounts of financing. Business angels and venture capital are other sources that provide capital for growing businesses.
Sourcefinance
There are internal and external sources of finance available for business growth. Internal sources include reinvesting profits and selling assets. External long-term sources are shares (ordinary and preference) and long-term loans such as debentures, while short-term sources include overdrafts, trade credit, factoring, and leasing. External growth can also be achieved through mergers and acquisitions requiring large amounts of financing from sources such as banks, business angels, and venture capital firms.
Sourcefinance
There are internal and external sources of finance available for business growth. Internal sources include reinvesting profits and selling assets. External long-term sources are shares (ordinary and preference) and long-term loans such as debentures, while short-term sources include overdrafts, trade credit, factoring and leasing. External growth can also be achieved through mergers and acquisitions requiring large amounts of financing from sources such as banks, business angels and venture capital firms.
Strategic Financial Management - Sources of Finance
Equity financing refers to raising capital by selling ownership stakes in a company. This can be done through common stock sales to the public or private groups, preferred stocks, venture capital, mezzanine financing, or crowd funding. Equity financing does not require immediate repayment and allows companies flexibility, especially startups, to focus on operations rather than debt obligations. However, equity financing dilutes ownership and control of the company.
Strategic Financial Management- Cash Management and Working Capital Finance
Cash management refers to collecting, handling, controlling, and investing an organization's cash and cash equivalents to ensure optimal use of liquid resources. It is essential to maintain a sound cash flow position. Working capital financing decisions involve determining how to finance the level and fluctuations of net working capital, which can be divided into non-current fixed assets, permanent current assets required for normal operations, and fluctuating current assets that vary seasonally. Financing strategies range from aggressive, using mainly short-term financing, to conservative, relying primarily on long-term financing.
Internal financing
An existing company can generate internal financing through retained earnings, profits plowed back into the business, and depreciation. Profits not distributed to shareholders are retained and reinvested in the company, a process known as self-financing. Benefits of plowing profits back include economic expansion and growth, redemption of loans, satisfying working capital needs, and making the company self-reliant. However, over-capitalization, creation of monopolies, and shareholder dissatisfaction are potential limitations. Depreciation is the gradual decrease in asset value over time, which is recorded through book entries that reduce asset book value and profits by the same amount each year.
Financial Ratios, Principal-Agent Conflict, Stakeholder Theory and Overall Fi...
Financial Ratios, Principal-Agent Conflict, Stakeholder Theory and Overall Fi...Dayana Mastura FCCA CA
* Share price at start of year: RM2.50 per share
* Number of shares held: 1000
* Market value at end of year: RM2.82 per share
* Dividend paid: RM0.28 per share
* Dividend received = 1000 shares x RM0.28 dividend per share = RM280
* Capital gain = 1000 shares x (RM2.82 - RM2.50) per share = RM320
* Total return = Dividend + Capital gain = RM280 + RM320 = RM600
* TSR = (Total return / Value of investment at start) x 100%
= (RM600 / RM2500) x 100% = 24%Acconntings
Changes in shareholder equity can impact a company's performance and market value. Shareholder equity represents the total value of assets owned by shareholders and is calculated by subtracting total liabilities from total assets. An increase in shareholder equity is generally positive as it may result from reduced debt, increased assets or profits. However, the specific reasons for changes are important to understand. Shareholders play important roles in company financing, governance, and control. National Bank of Pakistan is a major Pakistani bank with a goal to enhance profitability and maximize shareholder value.
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Sourcefinance
There are internal and external sources of finance available for business growth. Internal sources include reinvesting profits and selling assets. External long-term sources are shares (ordinary and preference) and long-term loans such as debentures, while short-term sources include overdrafts, trade credit, factoring, and leasing. External sources also allow for inorganic growth through mergers and acquisitions requiring large amounts of financing. Business angels and venture capital are other sources that provide capital for growing businesses.
Sourcefinance
There are internal and external sources of finance available for business growth. Internal sources include reinvesting profits and selling assets. External long-term sources are shares (ordinary and preference) and long-term loans such as debentures, while short-term sources include overdrafts, trade credit, factoring, and leasing. External growth can also be achieved through mergers and acquisitions requiring large amounts of financing from sources such as banks, business angels, and venture capital firms.
Sourcefinance
There are internal and external sources of finance available for business growth. Internal sources include reinvesting profits and selling assets. External long-term sources are shares (ordinary and preference) and long-term loans such as debentures, while short-term sources include overdrafts, trade credit, factoring and leasing. External growth can also be achieved through mergers and acquisitions requiring large amounts of financing from sources such as banks, business angels and venture capital firms.
Strategic Financial Management - Sources of Finance
Equity financing refers to raising capital by selling ownership stakes in a company. This can be done through common stock sales to the public or private groups, preferred stocks, venture capital, mezzanine financing, or crowd funding. Equity financing does not require immediate repayment and allows companies flexibility, especially startups, to focus on operations rather than debt obligations. However, equity financing dilutes ownership and control of the company.
Strategic Financial Management- Cash Management and Working Capital Finance
Cash management refers to collecting, handling, controlling, and investing an organization's cash and cash equivalents to ensure optimal use of liquid resources. It is essential to maintain a sound cash flow position. Working capital financing decisions involve determining how to finance the level and fluctuations of net working capital, which can be divided into non-current fixed assets, permanent current assets required for normal operations, and fluctuating current assets that vary seasonally. Financing strategies range from aggressive, using mainly short-term financing, to conservative, relying primarily on long-term financing.
Internal financing
An existing company can generate internal financing through retained earnings, profits plowed back into the business, and depreciation. Profits not distributed to shareholders are retained and reinvested in the company, a process known as self-financing. Benefits of plowing profits back include economic expansion and growth, redemption of loans, satisfying working capital needs, and making the company self-reliant. However, over-capitalization, creation of monopolies, and shareholder dissatisfaction are potential limitations. Depreciation is the gradual decrease in asset value over time, which is recorded through book entries that reduce asset book value and profits by the same amount each year.
Financial Ratios, Principal-Agent Conflict, Stakeholder Theory and Overall Fi...
Financial Ratios, Principal-Agent Conflict, Stakeholder Theory and Overall Fi...Dayana Mastura FCCA CA
* Share price at start of year: RM2.50 per share
* Number of shares held: 1000
* Market value at end of year: RM2.82 per share
* Dividend paid: RM0.28 per share
* Dividend received = 1000 shares x RM0.28 dividend per share = RM280
* Capital gain = 1000 shares x (RM2.82 - RM2.50) per share = RM320
* Total return = Dividend + Capital gain = RM280 + RM320 = RM600
* TSR = (Total return / Value of investment at start) x 100%
= (RM600 / RM2500) x 100% = 24%Acconntings
Changes in shareholder equity can impact a company's performance and market value. Shareholder equity represents the total value of assets owned by shareholders and is calculated by subtracting total liabilities from total assets. An increase in shareholder equity is generally positive as it may result from reduced debt, increased assets or profits. However, the specific reasons for changes are important to understand. Shareholders play important roles in company financing, governance, and control. National Bank of Pakistan is a major Pakistani bank with a goal to enhance profitability and maximize shareholder value.
Sources of capital
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External Sources of Finance
This document discusses various types of external sources of finance for companies, including shares and preference shares. It provides details on what shares are, the different types of shares (equity/ordinary shares), rights that come with shares like voting rights and claims on profits/assets. It also discusses the merits and demerits of equity financing for both companies and shareholders. Preference shares are also covered, outlining the four types and merits for companies and shareholders as a source of finance, as well as some disadvantages.
Sources of finance
There are several types of businesses based on their ownership structure. A sole trader business has one owner, while a partnership has between 2 and 20 owners who share responsibility. A private limited company exists separately from its owners/shareholders and provides limited liability. It issues shares to friends and family but not the public. A public limited company also provides limited liability but issues shares that are traded publicly on a stock exchange, allowing it to raise larger amounts of capital. Both private and public limited companies must register with Companies House and submit annual audited accounts and governance documents.
Capital structure by NEERAJ SINDHU
This document discusses capital structure and its key aspects. It defines capital structure as the mix of long-term funding sources for a company, including equity, preference shares, debentures, and retained earnings. It outlines features like return, risk, simplicity and flexibility. Factors affecting capital structure are also examined, such as trading on equity, government policy, and purpose of financing. The merits and demerits of different capital structure options are analyzed, such as no fixed liability but dilution of control with equity shares.
Corporate Finance - Financial Reconstruction and Business Reorganisation
This document discusses various types of financial reconstruction and business reorganization. It describes organizational reconstruction, which involves changing how a company's operations are organized, and portfolio reconstruction, which involves changing the portfolio of business operations through divestments, demergers, and acquisitions. Reasons for business reorganizations include financial needs like raising cash, and strategic needs like protecting parts of the business. Specific reorganization methods discussed include divestment, management buyouts (MBOs), and management buyins (MBIs). Advantages and disadvantages of MBOs and MBIs are also summarized.
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Dividends decision
The document discusses dividend decision, which is one of the three major financial decisions management must make. Dividend decision relates to how much profit to distribute to shareholders as dividends versus retaining for reinvestment. The dividend policy should aim to maximize shareholder wealth. Key factors that influence dividend decision include amount of earnings, stability of earnings, growth opportunities, cash flow position, and impact on stock price. Companies with stable earnings can pay higher dividends.
Holding & subsidary Company
As per Companies Act, 1956 :
Holding Company: A holding company is a parent company that owns enough voting stock(more than 50%) in a subsidiary to make management decisions , influence and contorl the company's board of directors
Factors affecting dividend policy
A brief presentation on the factors affecting dividend policy prepared for class room presentation at Institute of Management in Kerala
SOURCES OF LONG TERM FINANCE & RAISING LONG TERM FINANCE
This document discusses various long-term sources of finance for businesses including equity shares, internal accruals, preference shares, term loans, debentures, and venture capital. It provides details on each type of financing such as their characteristics, benefits, and risks. The key long-term sources of finance mentioned are equity shares, retained earnings, debentures, and term loans. The document also explains the process of raising finance through initial public offerings, rights issues, and private placements.
Long Term Financing
Long term financing involves raising funds for periods of 7 years or more, typically to finance fixed assets or permanent working capital needs. Common sources of long term financing include equity such as common stock or preferred stock, as well as debt instruments like bonds or bank loans. The costs of these various long term financing options must be calculated, taking into account factors like interest rates, dividend yields, maturity periods, tax rates, and flotation costs. The appropriate price or value is then determined for equity and debt instruments based on these cost of capital calculations and future cash flow expectations.
Joint venture
A joint venture is when two or more companies collaborate on a business project together for a set period of time. There are two main types of joint ventures: domestic, involving partners from the same country, and international, involving partners from different countries. Joint ventures provide benefits like accessing new markets, resources, expertise, and risk sharing. However, they also pose disadvantages such as being time-consuming to set up and potential cultural/management clashes between partners. Key aspects of a joint venture agreement include ownership structure, management roles, decision making processes, funding, intellectual property sharing, and termination conditions.
dividend policy.pptx
A dividend policy is the policy a company uses to structure its dividend payout to shareholders. Some researchers suggest the dividend policy is irrelevant, in theory, because investors can sell a portion of their shares or portfolio if they need funds.
The private equity fund
Private equity funds are investment vehicles comprised of limited partners who invest capital and general partners who manage the funds. They have a limited lifetime of typically 10 years to make investments and then another 2 years to sell investments and return profits to investors. General partners receive management fees of around 1-2% of assets under management as well as carried interest, usually 20% of profits above an 8% hurdle rate. This structure allows for investors and managers to benefit from private equity returns without incurring multiple layers of taxation.
Retained Earnings, Institutional Borrowing and Public Deposit
Retained earnings are a company's cumulative profits less dividends paid to shareholders over time. A large retained earnings balance implies financial health. Retained earnings are adjusted for any entries that impact revenue or expenses. Factors like a company's age, dividend policy, and profitability affect the size of its retained earnings.
Institutional borrowing includes term loans over 5 years from commercial banks, development banks like IDBI and ICICI, and investment institutions like LIC and mutual funds. These loans finance new projects, expansion, and modernization.
Public deposits are unsecured deposits from the public that companies invite through advertisements to finance working capital needs. Deposits can be for 6 months to 3 years, making
Multiple sources of finance
This document discusses various sources of finance for businesses. It explains that all businesses, regardless of size, require financing to operate and achieve their goals. It then outlines different sources of financing like retained earnings, trade credit, leasing, public deposits, commercial paper, equity shares, preference shares, debentures, bank loans, financial institutions, and international markets. The document concludes by noting businesses must consider factors like cost, purpose, flexibility, and tax benefits when deciding which source of financing to use.
Formation of limited liability company
A limited liability company (LLC) is a business structure where the owners (shareholders) are liable only to the amount they have invested. There are two main types of LLCs - private limited companies and public limited companies. Private limited companies have a minimum of one shareholder and do not have to trade shares on a public exchange or publish financial statements, while public limited companies have a minimum of two shareholders and must trade shares publicly and publish financial statements annually. To form an LLC, one must obtain name approval, prepare articles of association and sign shareholder documents, appoint directors and a secretary, submit required documents and pay fees, and obtain a company certificate and advertise the new company.
Major decions in finance
Financial management deals with planning and controlling a firm's financial resources, including procuring funds and utilizing them effectively. There are four major financial decisions:
1. Financing decisions involve acquiring long-term funds either from shareholders or loans. Managers must weigh the advantages and disadvantages of different sources.
2. Dividend decisions determine how much earnings to distribute to shareholders versus retaining for future needs. Considerations include growth requirements, cash flow, taxes, and legal restrictions.
3. Investment decisions involve selecting assets to invest in based on profitability as well as what property, plant and equipment the firm should hold.
4. Liquidity/working capital decisions ensure sufficient short-term funds for day
Sources Of Finance
Short term sources of finance include commercial papers and factoring. Commercial papers are money market instruments issued by companies with good credit ratings for 3 months to 1 year. Factoring involves selling a company's receivables to a factoring agent in exchange for immediate financing, with the factor taking on the risk of debt.
Long term sources include shares, debentures, term loans, venture capital and lease financing. Shares are equity while debentures are debt securities. Term loans are obtained from banks for capital expenditures. Venture capital provides early stage financing for new companies in exchange for equity. Lease financing involves leasing assets from a lessor.
Financial restructuring methods include debt-equity swaps,
Joint venter & merger
This document provides information about joint ventures and mergers. It defines a joint venture as a contractual agreement between two or more parties to undertake a particular business venture and share profits and losses. It lists types of joint ventures like partnerships. Benefits include access to new markets while risks include different objectives between partners. Examples given are a joint venture between two hospitals. A merger occurs when two companies combine to form a single company, absorbing one by the other. Different types of mergers are defined like horizontal and conglomerate mergers. Examples of mergers are provided.
Mutual fund
Mutual funds pool money from investors and invest it in stocks, bonds, and other securities to generate returns. In India, mutual funds are regulated by SEBI and managed by asset management companies. Some of the largest mutual fund companies in India include Reliance Mutual Fund, HDFC Mutual Fund, ICICI Prudential Mutual Fund, and SBI Mutual Fund. Mutual funds offer investors benefits like diversification, professional management, and lower costs.
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Detail info of various sources of generating capital for the beginning & and the growth stages of the business.
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This document discusses various types of external sources of finance for companies, including shares and preference shares. It provides details on what shares are, the different types of shares (equity/ordinary shares), rights that come with shares like voting rights and claims on profits/assets. It also discusses the merits and demerits of equity financing for both companies and shareholders. Preference shares are also covered, outlining the four types and merits for companies and shareholders as a source of finance, as well as some disadvantages.
Sources of finance
There are several types of businesses based on their ownership structure. A sole trader business has one owner, while a partnership has between 2 and 20 owners who share responsibility. A private limited company exists separately from its owners/shareholders and provides limited liability. It issues shares to friends and family but not the public. A public limited company also provides limited liability but issues shares that are traded publicly on a stock exchange, allowing it to raise larger amounts of capital. Both private and public limited companies must register with Companies House and submit annual audited accounts and governance documents.
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This document discusses capital structure and its key aspects. It defines capital structure as the mix of long-term funding sources for a company, including equity, preference shares, debentures, and retained earnings. It outlines features like return, risk, simplicity and flexibility. Factors affecting capital structure are also examined, such as trading on equity, government policy, and purpose of financing. The merits and demerits of different capital structure options are analyzed, such as no fixed liability but dilution of control with equity shares.
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This document discusses various types of financial reconstruction and business reorganization. It describes organizational reconstruction, which involves changing how a company's operations are organized, and portfolio reconstruction, which involves changing the portfolio of business operations through divestments, demergers, and acquisitions. Reasons for business reorganizations include financial needs like raising cash, and strategic needs like protecting parts of the business. Specific reorganization methods discussed include divestment, management buyouts (MBOs), and management buyins (MBIs). Advantages and disadvantages of MBOs and MBIs are also summarized.
Capital market instruments
The slides explains the meaning and features of Capital market and the important capital market instruments
Dividend Decisions
This document discusses factors that affect a company's dividend decision. It identifies 11 key factors: legal provisions, magnitude of earnings, shareholders' desires, industry nature, company age, taxation policy, control factors, liquidity position, future requirements, agency costs, and business risk. These factors influence a company's ability to pay dividends and how much it should pay out versus retaining earnings. The document also briefly outlines relevance and irrelevance theories of dividend decisions.
Dividends decision
The document discusses dividend decision, which is one of the three major financial decisions management must make. Dividend decision relates to how much profit to distribute to shareholders as dividends versus retaining for reinvestment. The dividend policy should aim to maximize shareholder wealth. Key factors that influence dividend decision include amount of earnings, stability of earnings, growth opportunities, cash flow position, and impact on stock price. Companies with stable earnings can pay higher dividends.
Holding & subsidary Company
As per Companies Act, 1956 :
Holding Company: A holding company is a parent company that owns enough voting stock(more than 50%) in a subsidiary to make management decisions , influence and contorl the company's board of directors
Factors affecting dividend policy
A brief presentation on the factors affecting dividend policy prepared for class room presentation at Institute of Management in Kerala
SOURCES OF LONG TERM FINANCE & RAISING LONG TERM FINANCE
This document discusses various long-term sources of finance for businesses including equity shares, internal accruals, preference shares, term loans, debentures, and venture capital. It provides details on each type of financing such as their characteristics, benefits, and risks. The key long-term sources of finance mentioned are equity shares, retained earnings, debentures, and term loans. The document also explains the process of raising finance through initial public offerings, rights issues, and private placements.
Long Term Financing
Long term financing involves raising funds for periods of 7 years or more, typically to finance fixed assets or permanent working capital needs. Common sources of long term financing include equity such as common stock or preferred stock, as well as debt instruments like bonds or bank loans. The costs of these various long term financing options must be calculated, taking into account factors like interest rates, dividend yields, maturity periods, tax rates, and flotation costs. The appropriate price or value is then determined for equity and debt instruments based on these cost of capital calculations and future cash flow expectations.
Joint venture
A joint venture is when two or more companies collaborate on a business project together for a set period of time. There are two main types of joint ventures: domestic, involving partners from the same country, and international, involving partners from different countries. Joint ventures provide benefits like accessing new markets, resources, expertise, and risk sharing. However, they also pose disadvantages such as being time-consuming to set up and potential cultural/management clashes between partners. Key aspects of a joint venture agreement include ownership structure, management roles, decision making processes, funding, intellectual property sharing, and termination conditions.
dividend policy.pptx
A dividend policy is the policy a company uses to structure its dividend payout to shareholders. Some researchers suggest the dividend policy is irrelevant, in theory, because investors can sell a portion of their shares or portfolio if they need funds.
The private equity fund
Private equity funds are investment vehicles comprised of limited partners who invest capital and general partners who manage the funds. They have a limited lifetime of typically 10 years to make investments and then another 2 years to sell investments and return profits to investors. General partners receive management fees of around 1-2% of assets under management as well as carried interest, usually 20% of profits above an 8% hurdle rate. This structure allows for investors and managers to benefit from private equity returns without incurring multiple layers of taxation.
Retained Earnings, Institutional Borrowing and Public Deposit
Retained earnings are a company's cumulative profits less dividends paid to shareholders over time. A large retained earnings balance implies financial health. Retained earnings are adjusted for any entries that impact revenue or expenses. Factors like a company's age, dividend policy, and profitability affect the size of its retained earnings.
Institutional borrowing includes term loans over 5 years from commercial banks, development banks like IDBI and ICICI, and investment institutions like LIC and mutual funds. These loans finance new projects, expansion, and modernization.
Public deposits are unsecured deposits from the public that companies invite through advertisements to finance working capital needs. Deposits can be for 6 months to 3 years, making
Multiple sources of finance
This document discusses various sources of finance for businesses. It explains that all businesses, regardless of size, require financing to operate and achieve their goals. It then outlines different sources of financing like retained earnings, trade credit, leasing, public deposits, commercial paper, equity shares, preference shares, debentures, bank loans, financial institutions, and international markets. The document concludes by noting businesses must consider factors like cost, purpose, flexibility, and tax benefits when deciding which source of financing to use.
Formation of limited liability company
A limited liability company (LLC) is a business structure where the owners (shareholders) are liable only to the amount they have invested. There are two main types of LLCs - private limited companies and public limited companies. Private limited companies have a minimum of one shareholder and do not have to trade shares on a public exchange or publish financial statements, while public limited companies have a minimum of two shareholders and must trade shares publicly and publish financial statements annually. To form an LLC, one must obtain name approval, prepare articles of association and sign shareholder documents, appoint directors and a secretary, submit required documents and pay fees, and obtain a company certificate and advertise the new company.
Major decions in finance
Financial management deals with planning and controlling a firm's financial resources, including procuring funds and utilizing them effectively. There are four major financial decisions:
1. Financing decisions involve acquiring long-term funds either from shareholders or loans. Managers must weigh the advantages and disadvantages of different sources.
2. Dividend decisions determine how much earnings to distribute to shareholders versus retaining for future needs. Considerations include growth requirements, cash flow, taxes, and legal restrictions.
3. Investment decisions involve selecting assets to invest in based on profitability as well as what property, plant and equipment the firm should hold.
4. Liquidity/working capital decisions ensure sufficient short-term funds for day
Sources Of Finance
Short term sources of finance include commercial papers and factoring. Commercial papers are money market instruments issued by companies with good credit ratings for 3 months to 1 year. Factoring involves selling a company's receivables to a factoring agent in exchange for immediate financing, with the factor taking on the risk of debt.
Long term sources include shares, debentures, term loans, venture capital and lease financing. Shares are equity while debentures are debt securities. Term loans are obtained from banks for capital expenditures. Venture capital provides early stage financing for new companies in exchange for equity. Lease financing involves leasing assets from a lessor.
Financial restructuring methods include debt-equity swaps,
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Sourcefinance Ppt
There are internal and external sources of finance available for business growth. Internal sources include reinvesting profits and selling assets. External long-term sources are equity like shares and long-term loans such as debentures, while short-term sources include bank loans, overdrafts, and trade credit. External sources also allow for inorganic growth through mergers and acquisitions financed by methods like bank loans, business angels, and venture capital funds.
SOURCE OF FINANCIAL CAPITAL.pptx
Venture capital provides private funding to startup companies and involves investors receiving equity in exchange for funding. It allows companies to access capital for growth without taking on debt. Venture capitalists influence major decisions and help connect companies to business networks. Loans are a common funding source for small businesses but require repayment plus interest, while government programs provide grants and subsidies with specific eligibility criteria. Private placements and IPOs are other methods for raising capital, with private placements having fewer regulatory requirements but limited investor pools, and IPOs providing greater exposure but also increased disclosure and loss of control.
business finance
This document discusses business finance, including definitions, types, and sources. It defines business finance as planning, raising, managing, and controlling capital funds used in connection with business. Business finance involves arranging cash and credit to allow a business to achieve its objectives. A business requires both fixed and working capital for various purposes like starting operations, meeting expenses, and financing growth. Sources of funds include owner's funds like retained earnings and borrowed funds like bank loans, debentures, public deposits, trade credit, and commercial papers.
ED VR20 UNIT 4 PPT.pptx
Capital structure refers to the combination of debt and equity used by a company to finance its operations and growth. Debt includes bonds and loans, while equity includes common stock, preferred stock, and retained earnings. A sound capital structure allows a company to maximize shareholder value while minimizing costs. It also provides flexibility to adjust debt levels over time based on the company's situation. Venture capital is a form of financing provided to startups and small businesses believed to have long-term growth potential. It can be monetary funding or expertise and is typically allocated to companies with exceptional growth potential.
SOURCES OF FINANCE.pptx
Businesses require funds to meet short-term operating costs, long-term investments, start-up needs, and expansion goals. They have two main sources of finance: internal and external. Internal sources include owner's equity, retained profits, and sale of assets. External sources provide funding beyond what is available internally and include short-term options like overdrafts, trade payables, and credit cards as well as long-term options like bank loans, mortgages, debentures, share capital from investors, venture capital, and crowdfunding. Both internal and external sources have advantages and disadvantages for businesses.
Ways of Raising Finance
The document discusses various sources of finance for new businesses, including owner's funds, friends and family, bank loans, overdrafts, initial public offerings, retained profits, business angels, venture capitalists, government grants and loans, Islamic finance instruments, and how much capital is needed for non-current and current assets. It provides details on the advantages and disadvantages of different sources of finance like bank loans, overdrafts, leasing, hire purchase, and retained profits. It also discusses factors to consider when determining how much capital is required at different stages of a business.
Different Sources of financing Businesses.ppt
This document discusses various sources of financing for businesses. It outlines internal sources such as retained profits and sale of assets, as well as external sources including loans, overdrafts, shares, and debentures. The sources are categorized by time period, including short term (up to 3 years), medium term (3-10 years), and long term (over 10 years). Short term financing options include overdrafts, short term loans, trade credit, and hire purchase. Medium and long term options include longer term loans, leasing, and issuing shares. The document explains the advantages and disadvantages of different financing methods and factors considered by banks when approving loans.
Mergers and Acquisitions
The document provides an overview of a course on mergers and acquisitions. It discusses reasons for undertaking mergers and acquisitions, including pursuing growth, defensive strategies, and financial opportunities. Key motives for mergers and acquisitions include cost cutting, positioning for future opportunities, filling gaps in competencies, and broader market access. The document defines various types of mergers and acquisitions and the roles of stakeholders in M&A transactions such as bidding companies, target companies, investment banks, and legal advisors.
Joseph Fabiilli | The role of finance to grow a Business
Joseph Fabiilli is telling the role of finance to Grow a Business. Finance is the most important fact of a business.
Finance assignment help
The document discusses various types and sources of business finance classified based on period as short term, medium term, and long term finance and based on ownership as owner's funds and borrowed funds. It also explains key concepts in financial management like objectives, decisions around investment, financing, and dividends. Finally, it covers topics such as working capital, capital structure and provides additional resources for further information.
venture capital.pptx
Venture capital involves investing in projects with substantial risk that typically include new or expanding businesses. It provides start-up funding for these high-risk, high-reward ventures. Venture capitalists typically invest through various stages of a company from seed funding to expansion funding. They take an active role in the management of companies and aim to exit their investments within 5-10 years through means such as IPOs or acquisitions in order to generate returns. In India, the venture capital industry was formally established in 1987 and venture funds invest using various financial instruments such as equity, quasi-equity, and convertible debentures.
Bf chapter 1,2
Business finance includes all types of funds used in a business, such as owner's funds and borrowed funds. It is required for starting, operating, expanding, and modernizing a business. The amount required varies based on the nature and size of operations. Some key long term sources of finance include equity shares, preference shares, retained profits, debentures, loans from financial institutions and commercial banks. Short term sources include trade credit, advances from customers, discounting bills, bank overdrafts, cash credits and public deposits.
Various sources of financing
This document discusses the importance of finance for startups and the various sources of finance available. It notes that while personal sources from the entrepreneur are very important initially, startups often struggle to raise funds until more established. The main sources of finance discussed are internal sources like founder capital, retained profits, and friends/family money as well as external sources such as bank loans, angel investors, venture capital, trade credit, and issuing shares or debentures. Specific personal sources explored include using cash/investments, re-mortgaging property, credit cards, and working for free initially. The document provides an overview of each type of funding source.
Financial management
Financial management deals with planning and controlling a firm's financial resources. It involves three main functions: investment decisions, financing decisions, and dividend decisions. The investment decision involves deciding how funds should be allocated to long-term assets through capital budgeting and short-term assets through working capital management. The financing decision determines the optimal mix of debt and equity. The dividend decision establishes the portion of profits to distribute to shareholders versus retaining for reinvestment. The objectives of financial management are typically to maximize profits or shareholder wealth through efficient allocation of funds.
Financialmanagement
The document defines financial management and discusses its scope and functions. Under the traditional approach, the scope of finance is restricted to procuring funds, while the modern approach covers both acquiring and allocating funds efficiently. The key functions of financial management are investment decisions, financing decisions, and dividend decisions. Investment decisions involve capital budgeting and working capital management. Financing decisions determine the optimal debt-equity ratio. Dividend decisions balance paying dividends to shareholders with retaining profits for reinvestment.
Ventrue capital
Venture capital provides risk capital to startups and growing companies in exchange for equity. It is invested through various financing rounds as companies progress from seed to growth stages. Venture capitalists obtain funds from institutional investors and aim to exit their investments through IPOs or acquisitions within 3 to 7 years to generate returns exceeding traditional investments. They conduct extensive due diligence on management teams and business plans before structuring investments using various equity and debt instruments.
Introduction to financial management
The document discusses various topics related to business finance including:
- Definitions of finance, financial management, and the roles of the financial manager.
- Sources of finance including equity (shares), retained earnings, debentures, and term loans.
- Approaches to financial management including traditional (focusing on funds arrangement) and modern (focusing on funds acquisition and allocation).
- Financial decisions including investment, financing, dividend policy, and liquidity management.
- Objectives of financial management being profit maximization and wealth maximization.
So in summary, the document provides an overview of key concepts in business finance management, sources of finance, approaches and decisions in financial management, and
Mastering Financial Management
The document discusses various topics relating to financial management. It begins by defining financial management as activities concerned with obtaining and effectively using money. It then discusses the need for financing, covering short-term financing which is used for less than one year, such as for inventory, and long-term financing which is used for over one year. The document also discusses proper financial management during economic crises, careers in finance such as chief financial officers, developing financial plans by establishing goals and identifying funding sources, and sources of short-term and long-term debt financing as well as equity financing.
Introduction to private equity & venture capitalist fund
Venture capital refers to investments made in startup companies and small businesses with growth potential. Venture capitalists provide funding to companies in exchange for equity and play an active role in monitoring and advising the companies. The document discusses various aspects of venture capital including the types of investors, stages of financing, activities of venture capitalists like investing, monitoring and exiting investments, and key terms in a term sheet like liquidation preferences and founders' shareholding. It provides an overview of how venture capital works and the roles and considerations of venture capitalists and the companies they fund.
Similar to Sourcefinanceppt.final[1] (20)
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Joseph Fabiilli | The role of finance to grow a Business
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Introduction to private equity & venture capitalist fund
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Sourcefinanceppt.final[1]
- 3. WHAT IS SOURCE OF FINANCE?
- 12. Business Angels
- 14. Venture Capital
- 16. CONCLUSION
- 17. THANK YOU!