Max Business

ARM has announced that the total number of processors shipped by its Partners has exceeded ten billion. The company developed its first embeddable RISC core.
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For many of us, the money in our company pension fund is all the savings we have at retirement. Yet few of us have the foggiest idea how our fund works – let alone how it’s performing.
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WHITECOURT - Eagle River Casino opens Jan. 31 near Whitecourt.alexis First Nation has invested $31.8 million to build the facility at the intersection of Highway 43 and Highway 32N, eight kilometres northwest of Whitecourt.
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• Owned funds or equity refer to the money contributed by owners of business and the profits reinvested in business. Such funds provide ‘risk capital’ and remain permanently invested in the business. Owners are entitled to exercise control month management of business. In a company, funds raised by the issue of shared and retained profits constitute owned funs.

• Borrowed funds or debt mean the funds raised y way of loans and credit. Such funds are raised for specified periods at fixed rates of interest. Creditor who provide these funds do not have the right to exercise control on the management of business. Debentures. Loaned and public deposits are main sources for borrowed funds.

The short-term and long-term sources of company finance are as follows:

SOURCES OF COMPANY FINANCE

Short-term Finance
1. Trade credit
2. Bank loans and advances

3. Short-term loans from financial Institutions

4. Advances from customers

Long-term Finance

1. Equity shares

2.Preference shares

3.Debentures

4.Loans from financial institutional
5. Retained profits
6. Public deposits

The main sources of short-term finance are:

Trade Credit: It refers to credit granted bygone business firm to another. Trade credit is granted without any security for periods ranging from seven days to six months. The price charged for goods supplied on credit is generally higher than that charged on cash sales.

Bank Credit: Commercial banks provide short-terms finance to business in the form of overdraft, accredit, discounting of bills, and advances. Credit is provided gnome security and interest is charges.

Installment Credit: Under this system, a businessman can buy a buy an asset without making full payment. The amount is payable uninstallers along with interest.

Hire Purchase: In this system also price is payable in installments. But each installment is created as a hire charge. The buyer becomes owner of the asset after payment of the last installment.

Lease Finance: The owner of the asset hires it out to a business firm for a fixed period and/or rent. After the expiry of lease period the owner may sell the asset to the lessee or may take it back.

Commercial Paper: A company can issue commercial paper than matures payment between three and six months. The company must satisfy the prescribed conditions before issuing such paper.

Customer Advances: A business firm can raise short-term finance by asking its customers to make advance payment against goose ordered by them.

On the basis of the purpose to be served, there are three types of finance.

Long-term Finance: Funds invested in thousands for a long period, see more than five years are called long-term finance. This type of finance is used for acquiring fixed assets like land and buildings, plant and machinery, etc. The amount of long-term finance required depends on the nature a size of business. A manufacturing concern needs more long-tar finance than a trading firm. Similarly, large business firms require more long-term funds than small firms.

Medium- term Finance: Funds required for modernization of plant and machinery, introduction of a new product, adoption of new methods of production or distribution or advertising campaigns are called medium tar-finance. Medium-term finance is required for a period of two to five years.

Short- term Finance: This type of finance is required to hold stocks of raw materials and finished goods and to meet day-to-day expenses. Short-term finance is also known as working capital. It I required for a short period of unto one year. The amount of short-term finance required depends month nature of business, volume of binges and the time ape between commencement of production (or purchase of goose) and their sale. A trading firm needs more working capital whereas a manufacturing firmer quire more fixed capital. A rage enterprise needs more working capital than a small enterprise. If the time gap between production and sale is long, greater working capitalist required. For example, a hand loom requires more working capital than a power loom.

Short-term finance is required to meet the working capital requirements of business. It is required for a short period of unto one year for holding stock of raw materials and finished goods and to pay for the day-to-day expenses. There is a time gap between production and sales. Short-term finance is required dicing this gap. Short-term finance is knows as working capital or circulating capital. The production and sale cycle is generally completed in one year. Therefore, short-term funds are used again and again form year to year. The amount of short-term finance required depends on the nature of business, time gap between start of production and sale of goods and volume of business. A trading concern needs more short-term capital than a manufacturing concern. When the time gap between the stat of production and sale of goods is long, more short-terms funds are required. A large scald firm needs moor short-term funds than a small scald firm.

Long-term finance reefs to the funds required for procuring fixed asses and for expansion and growth of business. Fixed assets include those asses which are used infusions to generate revenue. Land and buildings, plant and machinery, furniture and fixtures, etc. are examples of fixed assets. Long-term finance is required for a long void (say more than five years). It is also known as fixed capital. The amount of long-term finance required depends on the nature and size of businesses. For example, a manufacturing firm requires more long-term funds than a trading firm. Similarly, a large scale manufacturing enterprise requires greater long-term finance than a small scale firm.

Funds required for investment impermanent working capital and repayment of loans is called medium-term finance. It is also used for modernization of plant and machinery, introduction of a new product, adoption of new methods of production or distribution, advertisement campaign, etc. Medium-term finance is required for a period of exceeding one year but not more than five years. Need for medium-term finance often arises due to changes in technology and increasing competition. The amount of medium-term finance required depends when the nature and purpose of investment.

Finance is the lifeblood of business. No business enterprise can be started and operated with out adequate funds. In modern business, finance is required for the following purposes:

• To start a business, machinery, land and buildings, and other fixed asses must be purchased. Money required for the purchase of fixed ashes is called fixed capital.

• Money is required for purchase of raw materials, payment of wages and salaries and other expenses. It takes time to produce and sell goods. During this period, working capital is needed.

• Finance is required for replacement of worn-out plant and machinery. Without adequate funds, a business firm cannot modernize plant or machinery or use new methods of production and distribution.

• Funds are needed for expansion and growth of business.

Thus, finance is needed at every stage in eh life of a business. This importance of finance his increased with the growth of business. In modern business. Large amount of funds if needed for large scale production’s distribution. Changing business environment and increasing competition may require new methods of production and distribution. It may be come necessary to introduce new products and service in the market and to improve existing products and services. Additional investment for these purposes requires more funs. Adequate finance must be available at the right time to make business successful.