MANAGING FINANCIAL RESOURCES AND DECISIONS

Managing Financial Resources and Decisions



Managing Financial Resources and Decisions

Introduction

The study is related to the managing financial resources and decisions. The principles or the procedure that the corporate finance includes can help organizations to get back on the track of success as for an organization and also for the economy, it is essential and necessary that to follow the methods or the procedures of the finance which can help the economy to keep up growing on the way of prosperity.

Discussion

Costs of Different Sources of Finance

Companies must meet the challenges of ensuring expanded reproduction. It is, therefore, timely and to the extent necessary venture funding from various sources allows the company to meet the challenges of doing business and their own development. However, to attract such funding entity, companies should have identified the sources of funds and must determine the best funding source. For the source of finance, companies can go for the internal and external source of finance.

In order to determine the best sources of finance Companies need to undertake some analysis of the company. Literate and informed choices of sources of funding will increase the impact of the use of funds and will not cause undue additional burden on business of having to refund. Companies offer the following when choosing a offering the finance, that is study of the enterprise and determination of its needs in the long and short-term financing; proposals in terms of optimizing the composition and structure of the company's assets; counseling to improve the financial sustainability of the enterprise; proposal to increase the impact of financing the company and reduce costs further.

Bank loans

In the event of insufficient equity, companies can borrow from a financial institution. It is important to know that the amount of bank loans which come under the category of external source of finance that will be granted will depend on the quality of the project and guarantees companies can offer. It will also depend on companies' personal contribution. It also consider leasing, which can be an interesting way to fund certain investments by avoiding cash flow problems related to payment. Companies need to maintain a minimum cash to fund its daily operational activities, the long-term financial situation may depend on the resources that are achieved in the short term which is why financial managers should take steps to secure these resources, so they must know which are the entities that at one time can help them out of a potential liquidity problem (Anthony and Marcia, 2005, 14-16).

Overdraft Facility

Companies use the overdraft facility; overdraft is crediting the bank checking account to pay for their client settlement documents in case of insufficiency or absence on the current account of the borrowing client funds. In this case, the bank debits the money from the customer's account in full, that is, automatically gives the client a loan in an amount exceeding the remainder of funds.

Overdraft facility differs from the usual overdraft loan so that debt repayment sent all amounts received on account ...