Unit 1 P4
Introduction:
In this assignment I am going to produce a report to explain the different sources of
finance for an accounting practice where I have been approached by clients, Jane
and Mohammed. There are various different sources of finance obtainable to
companies and organisations while opening up a business. Therefore, I am going to
explain the internal and external sources to my clients.
Scenario:
I am currently employed for an accounting practice where i have been approached
by clients, Jane Smith and Mohammed Khan. They are both planning to start a
business manufacturing take-away meals for supermarkets and therefore are seeking
my advice on how they can raise the necessary finance to start their business. They
have a combined capital of 300,000 to inject into their business, although this is
insufficient so they have to raise finance from other sources and that is where i come
in to help them. The building will cost them £475,000, while the manufacturing
equipment costing a further £210,000. They have told me that they prefer to
purchase the building rather than leasing or renting. A refrigerated lorry is required
at the cost of £85,000 in order to deliver their meals to the various retailers. Initial
stock required to manufacture the meals will cost £35,000, shelving costing £20,000
and a further £9,000 for packaging. As Jane and Mohammed only have £300,000
towards their initial start-up capital, there is a shortfall of £534,000. Therefore i will
give them advice on how this difference can be financed both internally and
externally.
Introduction:
In this assignment I am going to produce a report to explain the different sources of
finance for an accounting practice where I have been approached by clients, Jane
and Mohammed. There are various different sources of finance obtainable to
companies and organisations while opening up a business. Therefore, I am going to
explain the internal and external sources to my clients.
Scenario:
I am currently employed for an accounting practice where i have been approached
by clients, Jane Smith and Mohammed Khan. They are both planning to start a
business manufacturing take-away meals for supermarkets and therefore are seeking
my advice on how they can raise the necessary finance to start their business. They
have a combined capital of 300,000 to inject into their business, although this is
insufficient so they have to raise finance from other sources and that is where i come
in to help them. The building will cost them £475,000, while the manufacturing
equipment costing a further £210,000. They have told me that they prefer to
purchase the building rather than leasing or renting. A refrigerated lorry is required
at the cost of £85,000 in order to deliver their meals to the various retailers. Initial
stock required to manufacture the meals will cost £35,000, shelving costing £20,000
and a further £9,000 for packaging. As Jane and Mohammed only have £300,000
towards their initial start-up capital, there is a shortfall of £534,000. Therefore i will
give them advice on how this difference can be financed both internally and
externally.
