Business: Finance and Financial Management Essay

Submitted By louisaaa5
Words: 649
Pages: 3
Open Document
Influences on Financial Management: 1. Internal Sources of Finance:
Owners Equity is the funds contributed by owners/partners to establish and build the business.
Retained Profits is where not all the earnings/profits are distributed, but are kept in the business as an accessible and cheap source of finance.

2. External Sources of Finace:
External finance is the funds provided outside the business, eg: banks, other financial institutions, government, suppliers or financial intermediaries.
Debt: Short-term borrowing is provided by financial institutions through bank overdrafts, commercial bills and bank loans. Short term borrowing generally refers to those funds that will be repaid within 1-2 years.

Bank overdrafts is where the bank allows a business to overdraw on their account to an agreed limit and for a specific time.
Commercial bills are a type of bill of exchange (loan) issued by intuitions other than banks.
Factoring is the selling of accounts receivable for a discounted price to a finance or factoring company.

Debt: Long-term borrowing relates to the funds borrowed for periods longer than 2 years. Long term borrowing refers to mortgages and debentures.

Mortgage is a loan secured by the property of the borrower.
Debentures are issued by a company for a fixed rate of interest and for a fixed period of time.
Unsecured note is a loan for a set period of time but is not backed by an collateral or assets.
Leasing is a long-term source of borrowing for businesses. It involves the payment of money for the use of equipment that is owned by another party.

Equity refers to the finance raised by a company by issuing shares.

Ordinary shares are the most commonly traded shares in Australia. The purchase of ordinary shares by individuals means they have become part owners of a publicly listed company. They following terms refer to the variations in the type of issue or ordinary shares; * NEW ISSUE; a security that has been issued and sold for the first time on a public market. * RIGHTS ISSUE; the priviledge issued to shareholders to buy new shares in the same company. * PLACEMENTS; allotlmets of shares, debentures and so on made directly frim the company to investors.
Private equity is the money invested in a company not listed on the ASX.

3. Financial Institutions:
Banks are the major operations in financial markets and are the most important funds for a business.
Investment banks are one of the fastest growing sectors of the financial markets and provide specialised advice and services for business financial needs.
Finance and life insurance companies are non-bank financial institutions and act
Show More

Related Documents: Business: Finance and Financial Management Essay

Accounting: Management Accountants Essay

Consistent with other roles in today's corporation, management accountants have a dual reporting relationship. As a strategic partner and provider of decision based financial and operational information, management accountants are responsible for managing the business team and at the same time having to report relationships and responsibilities to the corporation's finance organization. The activities management accountants provide inclusive of forecasting and planning, performing variance analysis…

Words 395 - Pages 2

financial managment Essay

STRATEGIC FINANCIAL MANAGEMENT http://www.itilnews.com/financial_management.html 1. INTRODUCTION "Financial management is concerned with raising financial resources and their effective utilization towards achieving the organizational goals." Dr. S.N Maheshwari "Financial management is the process of putting the available funds to the best advantage from the long term point of view of business objectives." Richard A. Brealey 1.1: Scope of Financial Management : Financial management…

Words 917 - Pages 4

Importance Of Application For MBA

1:HR, 2:Finance, 3:Marketing , 4:Accounting , 5:Managerial Finance, 6:International Economics & Finance, 7: Master of Financial Economics, 8: Master of Quantitative Finance, 9: Master of Economics, 10:International Economics & Finance etc... After one of those courses you will be able to join as below: 1:Financial Managers or Financial Analysts 2:Corporate Controllers, 3:Accounting Managers, 4:Chief Financial Officers, 5:Treasurers and Finance Officers, 6:Chief Financial Officers…

Words 406 - Pages 2

Essay on Business Studies

Business Studies Study Notes The Financial Role of Management - Business Goals and Objectives - Businesses purposes for existing are translated in to goals → could include increasing dividends to shareholders, be environmentally friendly, Goals are the longer term outcomes of a businessesMain purpose is usually to maximise profits → can only achieve this if it has strategically planned how it will achieve this. Goals/purposes/mission → business objectives → strategic planning…

Words 684 - Pages 3

Develop Finance Strategy Management For Companies In Insurance Industry In Vietnam

Newcastle Business School Masters Dissertation Proposal Name: NGUYEN QUOC TIEN; Programme: Msc Business with Finance Management (SURNAME) (FORENAMES) This form MUST be accompanied by the Triplicate NBS PG Dissertation Registration Form The numbers of words for each section are for GUIDANCE ONLY. ------------------------------------------------- 1 Researchable Topic Area: The proposed title for the dissertation is “Develop finance strategy…

Words 3095 - Pages 13

intermediate accounting 2 test bank Essay

and Risk Management Chance 7 An Introduction to Derivatives and Risk Management Chance 8 An Introduction to Management Science: Quantitative Approaches to Decision Making Anderson 12 International Analysis for Financial Management Higgins 9 Anatomy & Physiology The Unity of Form and Function Saladin 5 Anatomy & Physiology with IP 9-System Suite Martini 1 Intermediate Accounting Kieso 15th Edition Test Bank Intermediate Accounting Kieso 15th Edition Test Bank Anderson's Business Law and…

Words 8328 - Pages 34

Role Of Finance For Managers

Finance for Managers BMA0063 2011/12 Student name: Mohammad Rabaia’h Tutor: JonathanDuxbury Student number: U1171709 Course: MBA The business school University of Huddersfield Count word: 4008 Table of content: 1.0 Introduction…………………………………………………. 2.0 Source of finance……………………………………………. 2.1 Alternative source of finance…………………………… 3.0 The role of management accountant………………………. 4.0 Analytical tool……………………………………………….. 4.1 The balance…

Words 4056 - Pages 17

Essay on Introduction To Financial Management

terms finance and financial management, and identify the major sub-areas of finance. Finance is the study of applying specific value to things individuals own to include services used and decisions determined [Finance by Cornett, M. M., Adair, T. A., & Nofsinger J. (2014). M: Finance (2nd ed.)]. In simple words, finance is how much value is attributable to goods and services and the basis of such attribution. Financial management may be defined as the management of the finances of a business or an…

Words 1136 - Pages 5

Functional Areas of Business Essay

Functional Areas of Business Angela B. Ball MGT/521 February 25, 2014 Dr. Nancy Atkins Functional Areas of Business A business consists of four areas of functionality – marketing, production, finance, and personnel. Marketing is the method used to move a product or service from its idea to customer consumption. Production is the process of creating a good or service. Finance is the manner in which a company handles and uses money. Personnel are the people employed by a business or organization. Each…

Words 1041 - Pages 5

Essay about Business Notes

Business Study - Finance Study notes Role of financial management: Strategic plan encompass a long-term view of where the business is going, how it will get there and a monitoring process to keep track of progress along the way. Business goals are the longer term outcomes of a business. Business objectives give a clear indication to management of where the business wants to be. Objectives of financial Management Profitability - The ability of a business to maximize its profit. Business must…

Words 1228 - Pages 5