Please enable JavaScript.
Coggle requires JavaScript to display documents.
B207 week 7 - Finance - tradition finacing of organisations Reading 16 -…
B207 week 7 - Finance - tradition finacing of organisations Reading 16
Finance: provides liquidity and capital
working captial
capital at bus disposal from dayto day bus activities
comprises: cash, inventory, payables and recievables
negative working capital
creditors finance bus operations: i.e. cust pays early
Factoring
selling recievables to 3rd party
a factoring house/debt collectors
recourse
factoring house will come back to co. if cust doesnt pay
no-recourse
risk of non payment transferred to factoring house
Banks
overdrafts
. the maximum size of the overdraft
. the interest chargeable
. whether fees are charged when the overdraft is utilised
. the review period – typically this is at least onceayear
. the covenants on financial performance (covenants are conditions
imposed by lenders on borrowers, for example in respect of the
borrower’s financial performance)
. the notice periods, if any, for drawing on the overdraft
. the security provided –
bank facility finance
credit score
bilateral facility
one bank
syndicated facility
more than one bank
3 month LIBOR
lease finance
operation finance
short term
finance leases
long term
Equity Finance
ordinary shares
no automatic voting right or entitlement to dividends
preferences shares
rate of dividend usually fixed
venture capital & private equity
venture capital companies are suppliers of private equity
mergers or accqusitions
Mullins five models
pay in advance
subscription
matchmaker
buyer and seller come together -ebay
scarcity
sell less for limited time
transition
customised