Assignment 1

Introduction

Finance is extremely essential in the operations of the business. When a business lacks finance, it will not be able to survive its first stage in the development. Finance is what allows the business operators to buy and then sell and in the process they make profits on the goods. It is necessary for business to make sure that they select the most appropriate sources of finance for their different needs because the different sources tend to have their own costs and benefits. There are different sources of finance that are classified as short term, long term, debt, equity, and internal and external. This paper will determine the different sources of finance for Coca Cola Company.  I decide to use Coca Cola Company because it is a large international company that manufactures beverages; thus, making profits through selling beverage products to consumers.

Sources of finance

Different means of funding are available for Coca Cola Company. This can include selling products at a cost that is more than the cost of production, and also borrowing money. Money can be borrowed through banks loans or through debt issues (Atrill & Mclaney 2006). The negative impact of borrowing money is the interest rate to be paid to the lender by the company. Another means in which a company can generate money is through selling a part of it to investors that are referred to as equity funding. Coca Cola Company gets its finance by selling its products. Another source of finance for the company is loans where the company receives loans from banks for a certain period of time. It is evident from the organization’s background that it has used limited shares through equity financing for the company (Atrill & Mclaney 2006). Equity and debt financing are a better way of raising funds for the company. Coca cola is a company that is selling beverages to clients, and in order to compete with its competitors, research and development is needed, and this is better done using equity financing. Equity financing is that money that is invested in the organization with no legal obligation for the entrepreneur to repay the principle amount.

Implication of the sources of finance

Equity financing can be done through a public offering. When the company sale shares to the public, this is the greatest way of acquiring large funds in a very short time period. Through the sale of shares, the image of the company is seen as being very strong in the eye of customers, suppliers, and financiers. This is a source of finance that is beneficial to Coca Cola Company. However, the negative implication of this source of funding is that the cost of the offering is high because of the accounting fees, distribution, legal fees, and prospectus printing (Atrill & Mclaney 2006). Loan is a source of funding used by the company, and it has its own implications. When using loans, the company borrows money from the bank that will be returned at a certain interest rate. This is a good form of financing for the organization because the repayment for the loan is normally spread over a long time period that is good for budgeting.

Assignment 2

Financial planning

Financial planning refers to planning the future of the business in order to make sure that the cash flow for years to come with show positive results. Financial planning is considered as the process for setting objectives, estimating future financial needs, assessing resources and assets, and also making plans in order to gain monetary goals (Rigdy 2011). This plan normally guides the daily decision making of the coca cola business….

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