Fixed assets re an asset that is not consumer or sold during the normal course of business, these are land, buildings, equipment, machinery, vehicles etc. These assets are very hard to convert Into cash as It takes time to sell, Tests would use these assets to fund future operations. Current assets: Current assets are a key financial source to Deco’s business. Current assets are cash and other things such as inventory that can be converted into cash easily. An asset that will be in use for less than a year is a current asset as they transfer into money once sold.
Deco’s stock In their stores is a current asset as they transfer into money once sold. An essential thing for Tests to ensure Is to ensure that their assets arena lower than their current liabilities (debt) as this may force Tests to close as they want to be able to pay off their debts. Working capital: Working capital can be both a good and a bad thing, this will depend on the debt a company has in this case Tests. Tests are a massive company so they will have a lot of working capital, this will ensure Tests grow as they can expand their brand.
Companies Like new starts will have finances to expand and grow their business. In 2014 Deco’s working capital reduced massively by over 300 million this will have an affect on their company in 2015. In this task I am going to write about what Internal and external sources of finance are available to Tests. Internal sources are funds that come from wealth the business. An example of an internal source is profits. They can be used to expand a business. Another way is to sell assets that the company don’t use to free up capital.
External sources are found outside the business. An example of an external source would be a bank lending company money. External sources of finance (Tests) Investments: 1 OFF hoping to make a profit on their investment into the organization. Tests rely massively on investments Just like any organization. Deco’s share prices depend on just how much is being invested into the company, and over the past year their share prices have dropped as the amount being invested has decreased. Warren Buffet who is an American billionaire, who made his fortune by investing said that ”
Investing in Tests was a big mistake”. Ordinary shares: Ordinary shares, are shares within an organization that any member o the public can buy. Deco’s shares are currently selling for around El 89. Pop , with Tests buying the shares back at around IEEE. Pop, since the horse meat scandal, shares have decreased rapidly. Since November 2013 Deco’s shares have declined drastically. Tests are unable to buy back the shares at a price high enough to push customers to sell back, as the customers wouldn’t be making enough profit. Corporations:
As Tests are a corporation they can part-take in all the activities any corporation are involved in such as hiring new staff, sue other companies, be sued by other companies and also own their own assets. An asset that Tests own is their very own oil plant in America Institutions: An institution of Tests would be their bank. The institutions are companies that work with Tests and that Tests own. Any money that Tests receive from the customers and clients of their bank, gets directly put in the profits. The money they make from the institutions gets invested directly back into Tests
Business angels: Business angels are people who look to invest into new or successful businesses to try to make a profit. For Tests business angels would’ve invented at the start of the companies Journey in 1919. Business angels usually invest in companies around their home so they can check up on their investments. Government Grants: Tests are Britain’s biggest supermarket and due to this they employ thousands. The government can give Tests grants and money to invest back into Tests. The government will benefit because if Tests invest the money wisely they will have a successful year therefore the government will receive more tax.
An example of Tests receiving a government grant was in 2009 when they received E million to open a new store in Glasgow. Hire purchase is when a company or person lends out goods to companies for a short they would lend out equipment, machinery, property and vehicles, as they would gain interest and also regain some of their investment into the product. Suppliers credit: Supplier’s credit is when a supplier offers the buyer the product they want on credit. This is like getting a loan of sorts as Tests can pay at a later date.
This benefits Tests as they can order as much stock as they need even if they haven’t got the finances at that time. Sale and lease back: This is when Tests sells something to a buyer such as equipment,machinery etc and the buyer leases the product back to Tests immediately. This benefits Tests as they can use the product without being tied down to the product financially. To Tests there is some tax benefits to leasing the product rather than actually owning the product. Tests can sell the products and lease them back for a long period of time.
