Introduction: In this assignment I was told to describe the external and internal finance for
Monsoon. I will research which of the internal and external sources are used or might be used by
Monsoon in order to improve the business. There are many sources of external and internal finances
so I will have to select the one that fits the business and those that might be really useful for
business such as Monsoon.
P4
External sources of Finance
Sales of Shares: Monsoon’s shares are available to be obtained by anyone, the value of one share in
Monsoon is 421.50p, this means the person that decides to buy the share is becoming a shareholder
and looking to get profit from it in the future, the shares are unlimited so this shows how much
money can be earn outside the business just by selling the sales to average people. The money that
is collected from shares can be used to improve the business or just added to the capital that will be
used later on.
New Shares Issues: New issues are sometimes referred to as primary shares or new offerings. Many
investors buy new issues because they often experience tremendous demand and, as a result, rapid
price increases. An investor who purchases a new issue should be aware of all the risks associated
with investing in a product that has only been available to the public for a short time; new issues
often prove to be rather volatile and unpredictable. Share values may surge up or down on the day of
issue. Monsoon money income also be coming from this example, the price increases so the
company gets more money that’s how the shares market works.
Right Issue: This is the option to the already existed shareholders, that offers the option to buy more
shares on discounted price, this is useful for the business and for the shareholders, as there will be
more money coming into the business and the shareholders will be satisfied with the discounted
price, but also the shareholders needs to think before investing again even though its discounted,
because the company might do this specially because they forecast shows that their shares price
might drop for some reasons, that’s why they might use this trick to get as much money now before
the crash. Everything depends on the company strategy.
Bank Loan: This kind of external source of finance is used more commonly in smaller business than
Monsoon, however, Monsoon is very reliable business with a lot of customer daily and sales revenue
also, if there would be a need for them to take a big loan they bank would give them the loan, this
could come up when Monsoon would decide to expand their business to new level and for example
open new line of store as right now there is Monsoon Accessorize, but if the owner decide to create
new line the money he got in the capital may not be enough to cover all the costs, so therefore he
might take millions of pound in loan from the bank. As the bank see his company as successful and
well doing company.
Internal sources of Finance
Increasing Sales: it’s very simple, if the business increase their selling rates then the revenue will be
higher, the hard part in this is to make it happen. There are few ways that it can happen. As Monsoon
is clothing store but not only, they might do a research of what would be on top in 2017 summer and
introduce it to their offer, this would probably increase their sales a lot, also a very popular method
Monsoon. I will research which of the internal and external sources are used or might be used by
Monsoon in order to improve the business. There are many sources of external and internal finances
so I will have to select the one that fits the business and those that might be really useful for
business such as Monsoon.
P4
External sources of Finance
Sales of Shares: Monsoon’s shares are available to be obtained by anyone, the value of one share in
Monsoon is 421.50p, this means the person that decides to buy the share is becoming a shareholder
and looking to get profit from it in the future, the shares are unlimited so this shows how much
money can be earn outside the business just by selling the sales to average people. The money that
is collected from shares can be used to improve the business or just added to the capital that will be
used later on.
New Shares Issues: New issues are sometimes referred to as primary shares or new offerings. Many
investors buy new issues because they often experience tremendous demand and, as a result, rapid
price increases. An investor who purchases a new issue should be aware of all the risks associated
with investing in a product that has only been available to the public for a short time; new issues
often prove to be rather volatile and unpredictable. Share values may surge up or down on the day of
issue. Monsoon money income also be coming from this example, the price increases so the
company gets more money that’s how the shares market works.
Right Issue: This is the option to the already existed shareholders, that offers the option to buy more
shares on discounted price, this is useful for the business and for the shareholders, as there will be
more money coming into the business and the shareholders will be satisfied with the discounted
price, but also the shareholders needs to think before investing again even though its discounted,
because the company might do this specially because they forecast shows that their shares price
might drop for some reasons, that’s why they might use this trick to get as much money now before
the crash. Everything depends on the company strategy.
Bank Loan: This kind of external source of finance is used more commonly in smaller business than
Monsoon, however, Monsoon is very reliable business with a lot of customer daily and sales revenue
also, if there would be a need for them to take a big loan they bank would give them the loan, this
could come up when Monsoon would decide to expand their business to new level and for example
open new line of store as right now there is Monsoon Accessorize, but if the owner decide to create
new line the money he got in the capital may not be enough to cover all the costs, so therefore he
might take millions of pound in loan from the bank. As the bank see his company as successful and
well doing company.
Internal sources of Finance
Increasing Sales: it’s very simple, if the business increase their selling rates then the revenue will be
higher, the hard part in this is to make it happen. There are few ways that it can happen. As Monsoon
is clothing store but not only, they might do a research of what would be on top in 2017 summer and
introduce it to their offer, this would probably increase their sales a lot, also a very popular method
