FINANCIAL ANALYSIS

Managing financial recourses and decisions



Managing Financial Recourses and Decisions

1.1 Sources of Finance available to 'Blue Mountain Solutions'

The sources of finance available to the Blue Mountain Solutions are personal savings, debt financing, lease and the equity financing. Miss Milfa Begum already has the £150,000 as the personal savings, so have to borrow £350,000 from the four mentioned finance sources. In the equity financing, an investors and shareholders will invest in the organization but the Blue Mountain Solutions have to give dividend to them from the profit part. While, in the debt financing, the bank or other financial institution will provides the finance but the Blue Mountain Solutions have to return the amount with the interest. Miss Milfa Begum already has the personal saving in her hand for the business financing which she got from the past workplace. Also, the Blue Mountain Solutions can get financing through the use of the lease method which includes obtaining the assets of the organization from the lease payment (Bhowmik and Saha, 2013, Pp. 61-71).

1.2 Implications of different Sources of Finance for 'Blue Mountain Solutions'

Equity Financing

Equity financing indicates exchanging part of the control of the organization for just a monetary investment in the business. Your control pole resulting from the money investment permits the actual buyer to share within the company's earnings. Equity involves some sort of everlasting investment in a firm and is not really refunded through the firm later on. Your investment needs to be adequately explained in a technically made organization. The money pole in a firm is usually as account products, since regarding a restricted legal responsibility firm or as widespread or chosen investment like some sort of business. Businesses might identify diverse instruction regarding investment to manage voting rights involving shareholders. Similarly, companies may use unique variations of chosen investment. As an example, widespread stockholders can certainly political election though chosen stockholders normally cannot. However widespread stockholders are last with series to the company's assets in the case of default or individual bankruptcy. Recommended stockholders be handed a fixed dividend before widespread stockholders be handed a dividend (Mcnally, 1994, Pp. 275-297).

Personal Savings

The primary area to consider funds can be your unique financial savings or money. Personal means may include profit-sharing or beginning old age resources, real estate property money loans, or cash price coverage.

Business loans

The business property mortgage is usually a mortgage supported through the price of the money. Should your residence have an active mortgage; it could offer resources within the variation between price of the place and also the past due mortgage total. Several residence money loans are set up like a revolving credit line through which you'll attract the quantity needed at any time. The eye using a residence money mortgage will be tax deductible.

Debt Financing

Personal debt financing involves credit resources through credit card companies with the stipulation regarding paying the actual borrowed resources in addition interest for a given potential moment. To the credit card companies (those loaning the actual resources for the business), ...