Business Finance and the Capital Structure
FIN 100
Strayer University
August 4, 2014

Business Financing and the Capital Structure Small business can finance their firms through debt or through equity sources of capital. Debt sources typically include; short or long-term loans from wealthy individuals to banks, while equity sources often include the owner’s wealthy individuals and/or Angel Networks. Venture capital is not a typical source of equity financing for most small business, as these businesses will not have the required growth potential Venture Capitals need to manage their risk return requirements.
Explain the process of financial planning used to estimate asset investment requirements for a corporation. Explain the concept of working capital management. Identify and briefly describe several financial instruments that are used as marketable securities to park excess cash. The financial planning process has eight specific steps. The financial planning process is the firms attempt to forecast the future, both the long and short-term future for sales, expense and etc. Using eight domains better captures the sophisticated nature of planning. Here are the eight steps in the Financial Planning Process: 1. Establish and Defining the Client-Planner Relationship. 2. Gathering Information Necessary to Fulfill the Engagement. 3. Analyzing and Evaluating the Client’s Current Financial Status. 4. Developing the Recommendations. 5. Communicating the Recommendations. 6. Implementing the Recommendations. 7. Monitoring the Recommendations. 8. Practicing within Professional and Regulatory Standards. The concept of working capital management is to ensure a company has sufficient cash flow in order to meet its short-term debt obligations and operating expenses. The