Max Business

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.

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.

Wholesales perform several useful functions and services. At the same time there is a growing demand for elimination wholesalers.
Case for Elimination
The arguments given for elimination off wholesalers are as follows:
Burden of Consumers: Wholesalers increase the cost of marketing. Their profit margin increases prices or consumers. In some cases consumers have to pay as much as 30 percent higher price due to the presence of wholesalers.
Unnecessary Hindrance: Wholesalers slow down the movement of goods form the producer to consume. If they are eliminated, the producer will be able to establish direct links with retails. Therefore, consumers will get products more quickly.

Better Alternatives: Large scale retail organizations such as departmental stores, multiple shops and consumer cooperatives can directly buy goose form produced. They offer a better alternative to wholesaler.

No Risk Bearing: Wholesales assume little risk during normal times. During strikes and lockouts also produces rather than wholesalers bear the risk of loss.
Unreliable: A wholesaler maintains his lines with a producer only when it serves his interests. As soon as he gees better terms elsewhere, he changes his loyalty to other produces.

Price Rigging: Wholesalers often push up prices by creating artificial shortage of goose. Moreover, wholesales promote only those products which give them highest profit margins.

Ase Against Middlemen:
People who oppose elimination f wholesalers offer the following arguments:
Relief to Manufacturers: If wholesales are eliminated produces will themselves have to distribute gods. They will not be able to concentrate fully on production. Moreover, small produces have neither the money nor the item undertake distribution of goods.
Storage of Goods; Without wholesales, producers and retails would have to maintain large stocks of goods.
Relief to Retailers: In the absence of wholesalers, retailers will have to spend time and money on collecting goods from different producers.
Risk Bearing: When wholesalers are eliminated, manufactures and retails will have to bear the risks of keeping large stocks of goods.
Financing; Wholesales make ash payments to produces and allow credit to retailers. Their elimination wood deprives boot producers and retailers of an important source of finance require for distribution of goods.
Economies of Scale: Wholesalers carry out mass distribute of goods which intern permits mass product. Elimination of wholesalers will reduce the scale of operations and economies of scale will be lost.

It the good news for all the share holders that the Bombay stock exchange closes this week with the increase of 260 points. It is estimated that the rise in the Bombay stock exchange is due to the nuclear deal between the Indian government and Left Allies.

From morning it is seems that the Bombay stock exchange is not stable at all and marks its start form only 260.69 points and went to 14,424.87. Till now in Bombay stock exchange it is declared that out of 30 stocks 28 stocks end with the mark of profit.

There is a possibility that the nuclear deal will effect Congress government under the leader ship of Manmohan Singh but till now the leaders does not discuss any thing about the elections in this two days meeting.

The Bombay stock exchange today ratings is it is as low as 14,163.61 and as high as this day is 14,455.49.

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