Assess the implications of each method of finance

.Purpose of this assignment

This assignment is designed to enable learners to demonstrate their understanding of where and how to access sources of finance for a business and the skills to use financial information for decision making.

Task 1  (LO1: 1.1, 1.2, 1.3)

Imagine you are starting up and running a new business.  Identify and give a brief description of the business.  What might sources of finance be available to you?

Assess the implications of each method of finance to your business, in terms of legal, financial, dilution of control and in the event of Bankruptcy?

Prepare a table comparing the advantages and disadvantages of the different sources you have identified.

Evaluate the most appropriate method of financing the following projects:

1. You require an additional vehicle
2. You have received a large order and need additional staff and materials in order to fulfil the order on time
3. You are considering expanding the business into another city

To achieve a pass you will have clearly identified the sources of finance available depending on the type of business you have decided to set up.

To achieve a merit M1 you will have considered the implications of each method of finance and prepared the table as requested.

To achieve a distinction D2 you will have demonstrated an effective approach to independent research and study and have met all the deadlines. You will have used Harvard referencing and use formal and academic writing in your report.

Task 2  (LO2: 2.1, 2.2, 2.3, 2.4)

Imagine you are running small Salon/business. Analyse the costs of three different sources of finance to your business.

Explain the impact on The Financial Statements of the three sources of finance identified above. Explain the importance of financial planning and design a financial plan for the business. Include break-even analysis, cash flow forecast and projected profit & loss account.  Use estimated figures to calculate Revenue and Costs.

Assess the information needs of the following decision makers in your business:

a.         Your business partner

b.         Your bank manager

c.         The government

To achieve a pass you will carefully have assessed the costs and compared the compared the characteristics of three different sources of finance

To achieve a merit M3 you will show clear evidence of financial planning with evidence of figures provided as evidence.