...-- page 4 Investment -------------------------------------------------------------------------------------- page 5 Working Capital problems ------------------------------------------------------------------- page 5 Management of trade receivable ------------------------------------------------------------- page 6 Management of trade inventory -------------------------------------------------------------- page 6 Operating cash cycle (OCC) ------------------------------------------------------------------ page 6 Evaluation of Ventura plc proposal --------------------------------------------------------- page 7 Evaluation for four alternative sources of external finance ------------------------------- page 7 Business angels --------------------------------------------------------------------------------- page 7 Government assistance ------------------------------------------------------------------------- page 8 Leasing listing ----------------------------------------------------------------------------------- page 8 Alternative investment market (AIM) -------------------------------------------------------- page 8 Conclusion...
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...Part 2 According to AASB 117, a lease is defined as “an agreement whereby the lessor conveys to the lessee in return for a payment or series of payments the right to use an asset for an agreed period of time” (Certified Public Accountant Australia [CPA], 2009). Leasing is potentially advantageous to organizations in terms of maintaining effective asset management (Noland, 2006). For instance, due to changes in the dynamic business environment organizations are able to replace leased assets more rapidly compared to assets that are owned (Noland, 2006). Furthermore, although it is a more expensive option leasing provides management with the opportunity to utilize different equipment until the optimal combination in terms of productivity is attained (Noland, 2006). Thus, leasing allows an organization to attain flexibility and efficiency in order to keep its business operations current. In regard to AASB117, preparers of general purpose financial reports (GPFS) are required to categorize leases at the period of inception as either finance or operating leases. This is applied by evaluating the substance of the transaction rather than the form of the contract (CPA Australia,2009). If a non cancellable lease fulfills one or more criteria that includes; “a) ownership transfer to the lessee, b) a bargain purchase option, c) a lease term equating to a minimum 75 percent of the assets estimated useful life and d) the present value of the minimum lease payments to be minimum 90 percent...
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...15.1 Objectives 15.2 Concept of Lease Financing 15.3 Meaning of Lease Financing 15.4 Importance of Lease Financing 15.5 Types of Lease Agreements 15.5.1 Financial lease 15.5.2 Operating lease 15.5.3 Sale and lease back 15.5.4 Leveraged leasing 15.5.5 Direct leasing 15.6 Advantages of leasing 15.7 Leasing in India 15.8 Concept & Meaning of Hire purchase 15.9 Difference between Lease Financing and Hire Purchase 15.10 NSIC & Hire Purchase 15.11 Factoring 15.11.1 Factoring procedure 15.11.2 Merits 15.12 Summary 15.13 Glossary 15.14 Self Assessment Questions 15.15 Further Readings 15.0 INTRODUCTION In order to start and sustain a business one needs finance. In the unit one on feasibility study, you have already seen the process of estimating financial requirements. The process involved (a) making a list of all the assets (b) identifying the sources of supply (c) estimating the cost of acquisition when the assets are to be acquired on outright basis. Then investment requirements as well as entrepreneur’s fear will increase. To scare away the entrepreneur’s fear, the emphasis should be given to resources and not to the ownership. In this unit we intend to familiarize you with some important financial innovations i.e., leasing, hire purchase and factoring. 228 15.1 OBJECTIVES After going through this unit you should be able to • Describe the meaning of leasing • Explain the role and importance of lease financing in economic development of a country ...
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...‘Critically discuss the proposition that “IAS/AASB 117 does allow creditors to make appropriate risk evaluations of a firms statement of financial position”’. Leases are a common financial tool used by many businesses and individuals on a daily basis to transfer the ownership of many different types of assets. Creditors are largely involved with many leases and company balance sheets as they are always interested in making valued judgements of their financial position with the current leasing disclosure requirements providing some discrepancies for creditors in making these risk evaluations. These issues surrounding the treatment and disclosure of leases provide the need for rigorous speculation into the accounting treatment and classification of the different types of leases so that the users of financial statements are provided with a clear view of a firm’s financial position and performance. With the relative ease in which a company can manipulate the classification of their leases, it makes it hard for creditors to make valued judgements of a company’s balance sheet. The current guidelines of AASB 117 require a company to classify its leases as either a finance lease or an operating lease. Only finance leases are required to be disclosed on a company’s statement of financial position with operating leases being excluded. This is one potential issue arising for creditors as the balance sheet might therefore be an unreliable measure of a company’s financial position. Operating...
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...Business Proposal – Future Growth Inc. Executive Summary Background Future Growth Inc. (FGI) is a full-spectrum equipment financing, sales, and manufacturing company that has been in business for 67 years. Their primary product concentration areas are construction and forestry equipment. Originally the company offered only small consumer financing loans for households. The company expanded its product offerings into the commercial financing realm by providing business loans for acquisition, operations, and commercial real estate needs. The company made the decision to add to its product line by offering equipment financing, which began in 1946. The company created a subsidiary called Future Growth Inc. (FGI) for this purpose. After WWII, there was a spike in the demand for construction and forestry equipment because of the post-war housing boom. FGI was in a key strategic business position, possessing a significant portion of the equipment finance market, and made the decision to improve upon their position by purchasing an equipment manufacturing company, which they accomplished in 1951. Because of this single managerial decision, the company was able to grow and be profitable for the next 55 years. The company stock has risen from $5 per share to $85.60 per share. The company has witnessed six stock-splits over the decades, and the current stock price is $35 per share. With the global market downturn beginning in the late 2000s, the once stable and profitable company...
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...Business Proposal for Thomas Money Service Inc. Thomas Money Service Inc. has been in business since 1940 and provides a wide array of financial services for both individual consumers and large businesses. Thomas Money Service Inc. branched out in 1946 to include also a financing subsidiary called Future Growth Inc. (FGI) that specializes in equipment financing. The current global downturn, Thomas Money Service Inc. and FGI must restructure its operations and broaden its financial services for profit-maximization. This paper will identify how Thomas Money Service Inc. and its subsidiary FGI can improve its finance services for consumers and how its elasticity of demand and market structure can be analyzed to increase consumer spending. This paper will include ideas for increasing revenue, determination of the profit-maximizing quantity, how to use its marginal cost and revenue to maximize profit, non-price and pricing strategies, creation of barriers to entry, and product differentiation. How to Increase Revenue Thomas Money Service Inc. and FGI discontinued equipment financing of other brands of equipment when they began manufacture of their own equipment brand, Thomas Money Service can start cross-selling equipment financing to expand to other consumers and to give their current consumers more purchasing and finance options. This strategy will allow FGI to outpace competition by the development of new business opportunities, sales growth, increased revenue...
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...PPL Growth Strategy and Financing Policies Pennsylvania Power and Light Company (PPL) was originally incorporated in 1920 as holding company. 1920-1994 PPL operated as a vertically integrated utility. In 1994 the company’s management recognizing and anticipating changes to the electric utility industry chose to changes it strategy by creating a subsidiary PPL Global “to pursue business opportunities in the unregulated electricity marketplace” (Esty, Ferman3). Senior management recognizing the need to create a more competitive environment within the company began a restructuring process from 1994-2000. In 1999 the company announced it intended to double its generation capacity by 2005 “through acquisition of existing plants and development of new plants” (Esty, Ferman 4). Jim Abel and PPL’s Finance team determined that in order to execute this new strategy PPL needed to maintain access to large amounts of capital at low cost while maintaining the financial soundness of the corporate balance sheet. This culminated in the separation of its unregulated generation businesses from its regulated distribution and transmission businesses in 2000(Esty, Ferman 4). The environment PPL was operating in during this time was not conducive to PPL Global using Corporate Finance to raise the billions of dollars needed to fund the expansion of the company’s generation portfolio. To use Corporate Finance would result in a burden on the company as a whole while putting the PPL at risk of...
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...Finance 100 Dr. Crawford March 7, 2013 Strayer University, Augusta Campus Owning and operating your own business is a goal of most Americans. The thing about owning your own business is to understand the concepts of operating a small business. When thinking about starting a small business, a person must have a well written business plan. A business plan is an “a formal document that describes a business concept, outlines core business objectives, and details strategies and timelines for achieving those objectives” (Kelly & McGowan, 2012).A business plan consist of marketing: products and services offered, demand from customs, market and location, advertising and marketing plan and pricing strategy, Financial Management: amount needed to start, expected cash flow, projected income and balance sheet, etc...Operation: daily management, hiring and personnel policies, insurance coverage and leasing agreement (Gordick, 2003). Within a small business, a small business owner must be able to keep track of the money that is coming in and going out. Using the different financial source and equation to operate your business is essential in owning and operating a small business. Understanding the concepts will help you own, operates and sustain a small business. NPV and payback is a concept a small business owner must understand, when making decision in a small business. NPV or net present value method is a dynamic investment appraisal and a discounted cash flow method (Rudolf...
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...Business Proposal for Thomas Money Service Inc. Thomas Money Service Inc. has been in business since 1940 and provides a wide array of financial services for both individual consumers and large businesses. Thomas Money Service Inc. branched out in 1946 to include also a financing subsidiary called Future Growth Inc. (FGI) that specializes in equipment financing. The current global downturn, Thomas Money Service Inc. and FGI must restructure its operations and broaden its financial services for profit-maximization. This paper will identify how Thomas Money Service Inc. and its subsidiary FGI can improve its finance services for consumers and how its elasticity of demand and market structure can be analyzed to increase consumer spending. This paper will include ideas for increasing revenue, determination of the profit-maximizing quantity, how to use its marginal cost and revenue to maximize profit, non-price and pricing strategies, creation of barriers to entry, and product differentiation. How to Increase Revenue Thomas Money Service Inc. and FGI discontinued equipment financing of other brands of equipment when they began manufacture of their own equipment brand, Thomas Money Service can start cross-selling equipment financing to expand to other consumers and to give their current consumers more purchasing and finance options. This strategy will allow FGI to outpace competition by the development of new business opportunities, sales growth, increased revenue...
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... PANTONE Cool Gray 10 C C:0 C:0 M:0 Y:0 K : 72 M:0 Y:0 K : 72 Guide on Access to Finance ! The Egyptian Junior Business Association (EJB) is a nongovernmental organization, established in 1999 and formally registered in 2000 with a vision to become the “association of first choice among Egyptian Junior Business people who are committed to the development of a culture of Excellence, Ethics and Public Service” and a mission to “Provide a platform for dynamic business people to affect a positive business environment through Business Development & Social Responsibility promoting a culture of excellence & business ethics.” The Center for International Private Enterprise is a non-profit affiliate of the U.S. Chamber of Commerce and one of the four core institutes of the National Endowment for Democracy. CIPE has supported more than 1,000 local initiatives in over 100 developing countries, involving the private sector in policy advocacy and institutional reform, improving governance, and building understanding of market-based democratic systems. CIPE provides management assistance, practical experience, and financial support to local organizations to strengthen their capacity to implement democratic and economic reforms. CIPE key program areas include anti-corruption, advocacy, business association, corporate governance, access to information, the informal sector and property rights, and women & youth. CIPE programs are also supported...
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...Finance 2011/2012 Alternative Sources of raising capital in shipping corporations: Bridging the Funding Gap By Linos Alexandros Kogevinas 100021584 Supervisor: Dr. Giovanni Cespa Acknowledgments Having completed a rather long, but enjoyable year at Cass Business School , I feel obligated to thank a few people who helped me along the way. Firstly, I’d like to offer my most sincere thanks to my supervisor, Dr. Giovanni Cespa for accepting to supervise me and putting me on the right track with this dissertation. Following, I’d like to thank my family for their moral support throughout the year. Last but not least I’d like to thank the entirety of the staff at Cass who helped further my education throughout the year. To all of you, Thank you Abstract The goal of this thesis is to evaluate and present the main alternative sources of finance for shipping corporations in the scope of the post-2008 market downturn. By “alternative” the author refers to any source finance that is not vanilla financing i.e. bank debt. Lists of benefits and drawbacks for each alternative source will be presented for all parties of the transaction in question. This is done in order to present an evaluation that will facilitate the reader in understanding the value of each source as well as potential costs and risks. While there are numerous alternative sources that could be covered, the emphasis has fallen only on those that carry at least a sizeable portion of market...
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...Development of Non Bank Financial Institutions to Strengthen the Financial System of Bangladesh - MONZUR HOSSAIN∗ -MD. SHAHIDUZZAMAN∗ Abstract Non-bank financial institutions (NBFIs) represent one of the most important parts of a financial system. In Bangladesh, NBFIs are new in the financial system as compared to banking financial institutions (BFIs). Starting from the IPDC in 1981, a total of 25 NBFIs are now working in the country. As on June 30, 2001 the total amount of paid up capital and reserve of 24 NBFIs stood Tk.6901.8 million (BB, 2002). The NBFIs sector in Bangladesh consisting primarily of the development financial institutions, leasing enterprises, investment companies, merchant bankers etc. The financing modes of the NBFIs are long term in nature. Traditionally our banking financial institutions are involved in term lending activities, which are mostly unfamiliar products for them. Inefficiency of BFIs in long-term loan management has already leaded an enormous volume of outstanding loan in our country. At this backdrop, in order to ensure flow of term loans and to meet the credit gap, NBFIs have immense importance in the economy. In addition, non-bank financial sector is important to increase the mobilization of term savings and for the sake of providing support services to the capital market. The focus of this paper is to highlight the necessity and importance of NBFIs to strengthen the financial system for rapid economic development of the country. 1. Introduction...
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...Table of Contents * ------------------------------------------------- 1 Introduction * ------------------------------------------------- 2 History of GSPB * ------------------------------------------------- 3 Business in Bangladesh * ------------------------------------------------- 4 Mission Statement * ------------------------------------------------- 5 GSPB at a Glance * ------------------------------------------------- 6 Strength of GSPB * ------------------------------------------------- 7 Share Holding Structure * ------------------------------------------------- 8 List of Directors: * ------------------------------------------------- 9 BUSINESSES * ------------------------------------------------- * ------------------------------------------------- 9.0.1 Long/Mid-Term Finance * ------------------------------------------------- 9.0.2 Short Term Finance * ------------------------------------------------- 9.0.3 Real Estate Finance * ------------------------------------------------- 9.0.4 Corporate Finance * ------------------------------------------------- 9.0.5 Merchant Banking * ------------------------------------------------- 10 BOARD & MANAGEMENT * ------------------------------------------------- 11 KEY MANAGEMENTKEY * ------------------------------------------------- 12 MARKET ASPECT * ------------------------------------------------- ...
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... Sampath Bank PLC, Sri Lanka | 09.47% | 2. | Local Sponsors: | a) | One Bank Limited, Bangladesh | 04.86% | 29.09% | b) | SSC Holdings Limited, Bangladesh | 01.07% | | c) | Shanta Apparels Limited, Bangladesh | 01.74% | | d) | Others - Bangladeshi Individuals | 21.42% | | 3. | General Shareholders: | 61.44% | Shareholding Structure | 100.00% | | LankaBangla Finance went for public issue in 2006 and its shares are listed in both Dhaka Stock Exchange and Chittagong Stock Exchange since 17-October-2006 and 31-October-2006 respectively. LEASE FINANCE Leasing is a medium- term funding facility in the form of an agreement by contract between a “lessor” and a “lessee” upon which the latter is entitled to use the lessor’s asset in return for regular payment of rental for a fixed period of time. At the end of the leasing period, the lessee has the option to buy the...
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...Introduction………………………………………………………………….. ………. 03 Definition …………………………………………………………………………………… 07 Factors to be in mind while going for auto finance………………………. 07 Financing Glossary ………………………………………………………………………. 09 Best deal ………………………………………………………………………………………. 12 Prudential rules and regulations of SBP ………………………………………. 14 How does auto financing work ……………………………………………………… 16 Types of Auto Finance ………………………………………………………………. 19 Drawbacks of Auto finance ………………………………………………………… 20 Ijarah car financing ………………………………………………………………………. 22 Auto finance by commercial banks in Pakistan …………………………….. 25 Difference between ijara and conventional Auto Finance …………….. 33 Issuue of takaful…………………………………………………………………………… 37 Conclusion …………………………………………………………………………………… 39 INTRODUCTION: The subject of car finance comprises the different financial products which allows someone to acquire a car with any arrangement other than a single lump payment. The provision of car finance by a third party supplier allows the acquirer to provide for and raise the funds to compensate the initial owner, either a dealer or manufacturer. For Business sector finance: Car finance is required by both private individuals and businesses. All types of finance products are available to either sector, however the market share by finance type for each sector differs, partly because business contract hire can provide tax and cashflow benefits to businesses. Personal Car Finance: It is a complete subsector of personal finance, with...
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