UNIT 2, MANAGING FINANCIAL RESOURCES AND DECISIONS Essay

unit of measurement 2, MANAGING FINANCIAL RESOURCES AND DECISIONS - Essay ExampleAs a financial advisor, the business performance can be evaluated on the basis of the information that is obtained from the owner.In explaining the stock of pay for Motors Parts Direct Limited, it is important to sympathize its meaning for the business. Financing is extremely important for starting a business and draw profit from it. on that point be various sources of finance when a business is looking for start-up. The need for source of finance varies concord to the type of business. For processing a business huge amount of capital is needed (Iowa State University Extension, 2013). The source of finance for a business is basically equity or debt. In case of MPD Ltd only debt finance is used as source of finance. However, there are both long depot and long term debt for the business. The short and long term debt instruments for the business are discussed hence forth.From the above table it can be stated that the business has started its operation with the help of loan and overdraft. The two types of debt instruments are noted as the indebtedness for the company (Iowa State University Extension, 2013). This liabilities aims at decreasing the liquidity of the company, if the current asset base is not racy even the business does not have enough cash position to maintain a shelter working capital. For maintaining its working capital the company requires short term finance of 1,200,000. He also inescapably the finance for paying the suppliers and make payment to its employees. He needs the amount as these cash are paid even before payments are received from customers.Loan is a useful source of finance for business, which is provided by a single entity at an amour rate. This interest rate is specified by the loaner of the loan and it is not decided on mutual basis. If the lender is a bank then the interest rate depends upon the demand of the loan and the rate that are im posed on the banks by the central banks (Steffan, 2008 Fabozzi, 1998).