Managing Financial Resources

[Name of the Institute]

Abstract

Financial performance of the company can be enhanced and improved through financial management. This financial management least give consideration to the size of the company, daily cash flows and end financial results. Management usually takes those decisions that increase company efficiency and profitability and reduces cost of production and other expenses.

ABSTRACTII

INTRODUCTION1

DISCUSSION1

TASK 1: SOURCES OF FINANCE1

1.1The sources of finance available to London woods1

Internal Source of Finance1

Internal Source of Finance2

1.2Impact of the sources of finance3

1.3Appropriate sources of finance4

TASK 2: DIFFERENT COSTS AND FINANCIAL PLANNING5

2.1Costs of different sources of finance5

2.2Importance of financial planning6

2.3Good information for Decision Making7

2.4Impact of the sources of finance on financial statements8

TASK 3: CASH BUDGET LONDON WOODS LIMITED10

3.1Cash budget April - December 2013.10

Analysis11

3.2Carry out the following questions12

a)Cost of producing a single chair12

b)Cost per a single mini chair12

3.3 Decision on Production Machines13

TASK 4: FINANCIAL STATEMENTS14

4.1Main Financial Statements of Company14

4.2Financial statements Comparison18

4.3Financial ratios and Analyse19

CONCLUSION AND RECOMMENDATION20

REFERENCES22

APPENDIX25

Managing Financial Resources and Decisions

Introduction

Companies usually integrate and recognize comprehension business planning which has been an integral feature for avoiding business failure. When starting a business or an existing business always needs a right decision with respect of their financial resources for effective and attractive end results. In this section, the aim is to offer an understanding the sources of financial that are available for business and skills that are needed for financial information for better and effective decision making.

Discussion

Financial performance of the company can be enhanced and improved through financial management. This financial management least give consideration to the size of the company, daily cash flows and end financial results. Management usually takes those decisions that increase company efficiency and profitability and reduces cost of production and other expenses.

Task 1: Sources of Finance

The sources of finance available to London woods

Internal Source of Finance

Internal source of finance refers to the finance that can be raised from within company. This consists of profits, reduction in working capital, sale of an asset in market or leaseback of the assets or retains earnings.

Personal saving of the people involved in the business

Retained Earnings of the company i.e. is the undistributed revenue of the company

Working Capital i.e. money which is available with the company for daily activities Current assets - Current liabilities

Fixed assets sales i.e. excess of fixed assets can be sold to raise finance (usheproduction)

Internal Source of Finance

External sources of finance is that when company raise finance through from other party i.e. outside the company. This has been further divided into ownership and non-ownership. In ownership, company share profit with shareholders such as ordinary shares, preference (cumulative cumulative, Redeemable, Participating, convertible preference shares) Spilt stock and Public Offering while in non-ownership profit is not share by the lender of the capital since it is a debt to the company such as Debenture, Bank overdraft, Loan (short and Long), Hire purchase, Leasing, Grand by the government, Venture capitalistic, Factoring, discounting on Invoice and Receipt and issuance of Bonds or certificate (Moore, 2008, p. 300).

Impact of the sources of finance

The sources ...