Ways of raising finance
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Businesses need finance for various reasons such as expanding operations, purchasing new equipment or premises, covering periods of low demand, and starting new businesses. There are internal and external sources of finance. Internal finance comes from retained profits while external sources include bank loans and overdrafts. The type of finance a business chooses depends on how long they need the funds, whether it's short, medium, or long term. Short term finance is for under one year and includes cash flow, trade credits, and bank credits. Medium term is 1-5 years and includes loans and hire purchase. Long term over 5 years includes loans, shares, and retained profits to finance fixed assets and large expansions. A business must consider many factors like costs
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- Intermediate-term financing is used for small business expansions and typically comes from commercial banks and insurance companies. Common uses include machinery purchases and facility upgrades.
- Repayment is usually done through installment plans over 1-5 years. Options include equal principal payments, equal amortization, balloon payments, and deferred principal payments.
- Sources mentioned are private financial institutions like commercial banks, insurance companies, and finance companies, as well as government-backed banks
Sources_of_finance_10 EOB Unit2.pptx
This document summarizes various sources of finance for businesses. It discusses traditional sources like internal financing through retained earnings and debentures, and external financing through shares, debentures, public deposits, and bank loans. It also differentiates between long-term financing for fixed assets and short-term working capital financing. Modern sources of finance for startups and companies include angel investment, venture capital, and private equity funding.
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ITC is a large Indian conglomerate with diversified businesses including cigarettes, hotels, paper, food, and IT. Its vision is to be one of India's most valuable corporations through world-class performance and sustainable value creation. HUL is India's largest FMCG company with a portfolio of home and personal care brands. Its mission is to add vitality to life by meeting daily needs for nutrition, hygiene, and personal care. Reckitt Benckiser is a global manufacturer of health, hygiene, and home products. Its vision is healthier lives and happier homes through innovative solutions.
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The document discusses various considerations for international pricing strategies. It outlines different pricing methods like cost-based pricing, market-based pricing, and competitive pricing. It also discusses factors that affect international pricing such as competition, costs, product differentiation, exchange rates, and economic conditions of importing countries. The document then provides examples of pricing strategies such as using a standard worldwide price, competitive pricing based on market prices, and marginal pricing. It also gives the example of how Tata Nano might be priced if launched in the European market. Finally, it briefly introduces INCOTERMS which are international commercial terms of sale.
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一比一原版(UoB毕业证)伯明翰大学毕业证如何办理
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你做代理，可以改变自己，改变他人，给他人和自己一个机会大块就啃啃得满嘴满脸猴屁股般的红艳大家一个劲地指着对方吃吃地笑瓜裂得古怪奇形怪状却丝毫不影响瓜味甜丝丝的满嘴生津遍地都是瓜横七竖八的活像掷满了一地的大石块摘走二三只爷爷是断然发现不了的即便发现爷爷也不恼反而教山娃辨认孰熟孰嫩孰甜孰淡名义上是护瓜往往在瓜棚里坐上一刻饱吃一顿后山娃就领着阿黑漫山遍野地跑阿黑是一条黑色的大猎狗挺机灵的是山娃多年的忠实伙伴平时山娃上学阿黑也摇头晃脑地跟去暑假用不着上学阿钩
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Ways of raising finance
- 1. WAYS FOR RAISING FINANCE, FOR BUSINESS…
- 2. Why Do Business Need Finance To Expand the Business To Buy New Equipment To Buy Premises To Buy StocksTo Pay Bills To Cover A Fall In Demand To Pay Workers To Start A New Business
- 3. Sources of Finance Types of Finance INTERN AL EXTERNA L Money that is obtained from within the business, e.g. last year’s profit Using this type of finance is cheaper, but means that the money cannot be used for anything else. Money is obtained from outside the business, e.g. Bank loan, Overdraft. This usually requires interest to be paid on the money obtained.
- 4. Finance & Time The type of finance a business will use often, depends upon how long they need the money for: Short Term • Maximum for 12 months Medium Term • More than 1 year but less than 5 years Long Term • More than 5 years
- 5. Short Term Finance Budgeting and making financial plans for the period of one year or less. These funds are usually for business to run day-to-day operations including payments of wages to employees, inventory ordering and supplies. In order to understand short term finance it is necessary to understand the concept of CASH FLOW.
- 6. Cash Flow A business needs sufficient inflows of cash to finance its day-to-day outgoings. INFLOWS refers to money received by the business Examples: Sales Revenue Capital Loans Grants OUTFLOWS refers to money paid by the businessExamples: Purchases Rent & Rates Wages & Salaries
- 7. Why Is Cash Flow Important? Think a business as a water tank… There should always be cash available- so the water tank is never empty. If the water tank is never empty the business is in TROUBLE- it has a Cash Flow Problem. If this is not the case the business needs short term finance to overcome this problem.
- 8. Needs of Short Term Finance Cash flow from operations may not be sufficient to keep up with growth related financing needs. Firm may prefer to borrow now for this inventory or for their short term assets needs rather than wait until they have saved enough. Firm prefers short term financing due to: o Easier availability. o Usually has lower cost. o Matches need of short term assets like inventory.
- 9. Sources For Short Term Finance • Public Deposits • Trade Credits • Bank Credits • Discounting of Bills of Exchange • Advances From Customers • Native Money Lenders
- 10. Medium Term Finance Medium term finance are source of finance available for 3-5 years. Sources of Medium Term Finance These funds are usually used to expand the business and to replace expensive equipment. Medium Term Loans Hire Purchase Leasing
- 11. Long Term Finance Long term finance is usually thought of as being for periods in excess of 10 years. This finance is for securing the resource for long-term growth. Long term financing services are provided to those business entities that face a shortage of capital.
- 12. Need of Long Term Finance • To finance fixed assets • Expansion of business & company • Construction of projects on a BIG SCALE.
- 13. Sources For Long Term Finance Long term loans Issue of share Sale & lease back Retained profit Govt. assistance Venture capital Business angles Other Sources
- 14. A Business’s Choice of Finance The business’s choice of source of finance depends on several factors! There are too many consideration.. I don’t know which source to choose!!
- 15. Continue… • Cost • Financial Strength & Stability Operation • Form of Organization & Legal Status • Purpose & Time Period • Risk Profile • Control • Effect on Credit Worthiness
- 16. Conclusion There are many different funding option available to business owners who are seeking to raise capital. However, before they resume their funding quest, business owners should identify the different sources of capital and are encouraged to diligently work on meeting the required criteria. This includes ample industry research and the creation of an effective business plan.
- 17. PUJA DHAWAN SNEHA JAIN SUBRATA KR DEY Presented By: