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8/12/2019 Asm1 Mfrd-nguyn Hng Chin

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NAME OF STUDENT Nguyn Hng Chin

REGISTRATION NO 10120115

UNIT TITLE Unit 2: Managing Financial Resources and ecisions

ASSIGNMENT TITLE !ndi"idual #ssign$ent 1: Archies Company

ASSIGNMENT # 1 o% &

NAME OF ASSESSOR Marcus 'ang and Nguyen Huu Chi

Due a!e " am Oc! $%& $"'

!( )))))))))))))))))))))))))) here*y con%ir$ that this assign$ent is $y o+n +or, and notco-ied or -lagiari.ed %ro$ any source/ ! ha"e re%erenced the sources %ro$ +hich in%or$ation iso*tained %ro$ $e %or this assign$ent/

________________________________ ______________________ ignature ate

((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((

FOR OFFICIAL USE

1

NATIONAL ECONOMICS UNIVERSITY

BTEC HND IN BUSINESSAssi)nmen! Co*er Shee!


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ASSIGNMENT GRADE

Unit Outcomes

Ou!come E*ience +or!he

cri!eria

Fee,ac- Assessorsecision

In!erna./eri+ica!ion

Explore thesources of

finance

available toa business(Unit 2, 1

I!enti"# thesour$es o"

"inan$eavailable to a

business

a

Assess the

i%pli$ationso" the

!i""erentsour$es

,

Sele$tappropriatesour$es o"

"inan$e "or abusinesspro&e$t

c

Anal#se the

i%pli$ationso" finance asa resource

'ithin abusiness(Unit 2, 2

Assess an!$o%pare the

$osts o"!i""erent

sour$es o""inan$e

a

Explain thei%portan$e o""inan$ialplannin

,

Assess thein"or%ation

nee!s o"!i""erent!e$ision%a)ers

c

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Ou!come E*ience +or!he

cri!eria

Fee,ac- Assessorsecision

In!erna./eri+ica!ion

Explain the

i%pa$t o""inan$e on

the "inan$ialstate%ents

Meri! )raes a0are M" M$ M'

Dis!inc!ion )raes a0are D" D$ D'

1ro+essors ai!iona. +ee,ac- an commen!s

#ssign$ent 3ell4structuredRe%erence is done -ro-erly should *e done i% any

6"erall( you7"e

Areas +or impro*emen!2

ASSESSOR SIGNATURE DATE 3 3

NAME2/////////////////////////////////////////////////////////////////////////////////////////

4Ora. +ee,ac- 0as a.so pro*ie5

STUDENT SIGNATURE DATE 3 3

NAME 2////////////////////////////////////////////////////////////////////////////////////////

*


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FOR I+ER+AL USE O+L-

89R!F!9 9 N6

#;9 : //////////////////////////////////////////////////////////////////////////////

89R!F!9


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Table of Contents+AIO+AL ECO+O/ICS U+I0ERSI-1EC 3+4 I+ USI+ESS 1

Evi!en$e "or the $riteria2able o" Contents5Assin%ent6IIntro!u$tion6IIAssu%ption pro&e$t business78III/a&or Fin!in9

1as)17 9

2as) 2711*as) *712.as) .715

CO+CLUIO+18REFERE+CES19

5


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AssinmentI Intro!u$tion

Ar$hie An!re' is a %an 'ho has been 'or)in in the ele$troni$ in!ustr# "or 15 #ears+o', he 'ant to have o'ner $o%pan# an! "in! "our investor 'ill o into business 'ith hi%

he %ain pro!u$t o" his $o%pan# are ele$troni$ pro!u$tAbout the $apital, Ar$hie has :5;;;;, ea$h o" the investors has :125;;; an! the# 'ill

put into $o%pan#


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II Assu%ption pro&e$t business7

Assu%ption Ar$hie is a ne' $o%pan#, an! 'as set up in U>

U> is a lea!er in po'er an! tra!e "inan$eCit# o" Lon!on is one o" the lea!in "inan$ial%ar)et in the 'orl!

?Countr! an" ca#ita$%

Enlan!7 Lon!on

@$t?len 7E!inburh

Si!e UBn 7Car!i""

South Ai?len7el"ast

&Lanuaes7 Enlish an! UE+

?Reion% Christian

?Go'ernment an" Monarc(!% Constitutional%onar$h#

?Currenc!%oun!

(UK is at the forefront in conducting privatization of State enterprises, focused oninvesting abroad. This country has built a capitalist economy with strong industry, excellentservices.)

8


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= =

Materials 25> o% =2(500(000 ?25(000

'a*our 20> o% =2(500(000 500(000

8aria*le

o"erheads10> o% =2(500(000 250(000

Fi@ed o*erheads 20> o% =2(500(000 500(000

elling and

distri*ution5> o% =2(500(000 125(000

Raw materials &12 o% =?25(000 15?(250

Materials 50>

co$-lete112 o% =?25(000 52(0A&

'a*our 50>

co$-lete112 o% =500(000 B1(??C

8aria*le

o"erheads 50>

co$ lete

112 o% =250(000 20(A&&

11B(5A&

Materials 112 o% =?25(000 52(0A&

'a*our 112 o% =500(000 B1(??C

8aria*le

o"erheads112 o% =250(000 20(A&&

11B(5A&

e*tors 212 o% =2(500(000 B1?(??C

A02(0A&

Materials 1/512 o% =?25(000 CA(125

'a*our 4 50 +ee,s 150 o% =500(000 10(000

8aria*le

o"erheads112 o% =250(000 20(A&&

Fi@ed o"erheads 112 o% =500(000 B1(??C

elling and

distri*ution0/512 o% =125(000 5(20A

155(A&&

3or,ing ca-ital

reDuire$ent=A02(0A& 4 155(AA& ?B?(250

5.Credis is taken as

2. Raw materials are in stock for 3 months

The cos!s incurre in a year

4.Finished goods represent one month of production

3.Work in progess inventory is 2 months worth of !2 produced goods

. "entoers take 2 months #efore payment

III /a&or Fin!in

. $ask%

A) Ca$cu$ate t(e *or+in ca#ita$ re,uirements for -./0 for Arc(ie1s com#an! an"

e2#$ain t(e im#ortance of financia$ #$annin to Arc(ie an" (is in'estors)

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The importance of financial planningto !rchie and his investors"

DFinan$e is %one#, or, in broa!er ter%s,

it is a %onetar# arrane%ent %a!e inex$hane "or the abilit# to !o so%ethinhe basi$ sour$es o" %one# are save!,borro'ins, rants an! earnin (Courseboo), 2;1*, p25 So, Finan$ial lannin isa $ontinuous pro$ess to help #ou in %a)insensible !e$isions about #our %one# that$an help #ou a$hieve #our oals in li"e utthe =uestion is Dh# "inan$ial plannin isi%portant here are three reasons

? #anage your income and capital or

cash management /an# businesses ororaniGations have %onthl# $hanin inrevenues, the# have perio! $ash is plenti"ul,have perio! $ash is shortaes uil!in the"inan$ial plannin help the top to $ontrol%ore easil#, in$o%e expen!iture bu!etin'ill sho' the best 'a# possible in %anainin$o%e hus, %anae%ent o" in$o%e or"inan$ial plannin is ne$essar# in in$reasin$ash "lo'

? $osts priority" he "inan$ial plannin

pro$ess helps a $o%pan# $an be i!enti"# the%ost i%portant expen!itures, that brinabout i%%e!iate i%prove%ents inpro!u$tivit#, e""i$ien$# Sin$e, "inan$ialplannin $an help in appre$iatin the bestinvest%ent opportunities "or $o%panies

? !ssess the level of ris% in theinvestment" Ever#business 'ants to rea$hthe lon?run invest%ent

hus, "inan$ial planninhelps the% to assess an!avoi! the ris) in theinvest%ent

B) Arc(ie (as (ear" of 3IT an" EO45

6ut "oes not un"erstan" t(e "ifference

6et*een t(e t*o) E2#$ain t(e "ifference to

(im an" articu$ate t(e un"er$!in

assum#tions of eac( a##roac()

Hoo! inventor# %anae%ent is )e# to a$o%pan#


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? EO, E$ono%i$ Or!er uantit#7 isone o" the te$hni=ues "or inventor# $ontrol'hi$h %ini%iGes total hol!in an! or!erin$osts "or this #ear E$ono%i$ or!er =uantit#is the te$hni=ue that solves the proble% o"

%aterials %anae%ent EO is essentiall#an a$$ountin "or%ula !eter%ine! at 'hi$hthe $o%bination o" or!er $osts an! inventor#$osts to the least he result is the %ost $oste""e$tive 'a# to or!er =ualit#

ase! on these prin$iples, $al$ulation%etho!s 'ill $al$ulate the a!!itional ti%e toinventor# an! the nu%bers o" a!!inpro!u$t a"ter ea$h or!er he %o!el applie!in the $ontext o" suppl# an! stable supplieso" relativel# have oo! plannin

JIT EOQ

Just?in?i%e (JI is a %anae%entphilosoph# in Japan 'ith the ai% o"provi!in "or the riht ti%e, riht pro!u$tan! a%ount o" shares at the riht ti%e

E$ono%i$ Or!er uantit# (EO is a %etho!hat at pro!u$in perio! lare =uantities o"%aterials, businesses %aintaine! at the!esire! level 'ith %ini%al $ost

JI "o$us on %eetin the nee!s o" $usto%erson ti%e 'ith the riht =ualit# an! =uantit#'ith %ini%al resour$es, ti%e, an! 'aste%aterial

EO %aintains a "ixe! a%ount o" %aterial intheir inventor# an! have a !eree o"reoraniGation, in 'hi$h it %ust be a!!e! inor!er to avoi! shortaes an! a!!itional $osts

JI is !epen!ent on the 'or) ethi$ an!$o%%it%ent o" the entire 'or)"or$e o" the$o%pan#

EO is !epen!ent on "inan$ial an! %ar)etinstrate#

Assu%ption "or the JI %o!el7

? It !epen!s on the )in! o" pro!u$t that a $o%pan# pro!u$e JI 'or)s best in"oo! (perishable business, "ashion but $an also be applie! in $ars%anu"a$turin li)e in o#ota

? 3ave oo! bu#er?supplier relationships

? u#er shoul! near the supplier in lo$ation? Het e""e$tive $o%%uni$ation bet'een bu#er an! supplier in both 'a#s

? Hoo! !e%an! pre!i$tin or stable !e%an!

? Suppliers shoul! be "lexible (i" havin a $hanin in !e%an!, suppliers shoul!be able a!aptation

1;


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Assu%ption "or the EO %o!el

? he $ost o" the or!erin re%ains $onstant

? 4e%an! is $onstant (Course boo), 2;1*

? he pro!u$e ti%e is not $hanin or Gero (Course boo), 2;1*

? ur$hase $ost per unit are $onstant (ie no bul) !is$ounts (Course boo),2;1*

? he opti%iGe plan is "iure! out "or onl# one pro!u$t

?here is no !ela# in the replenish%ent o" the sto$), an! the or!er is !elivere! inthe =uantit# that 'as !e%an!e! (ie in 'hole bat$h

2. $ask 2%

On the %ar)et to!a#, in the shortter%, there are %an# "a$tors a""e$tin$usto%er 'hen !e$i!in to exten! tra!e$re!it Spe$iall#, 'ith Ar$hie? a ne'$o%pan#, $usto%er 'ants to see %ore an!%ore in"or%ation li)e appli$ation "or%s,Cost o" ra!e Cre!it ,et$ O" Ar$hie

? ra!e $re!it is one part o" the pro$essto buil! business $re!it It is an opena$$ount 'ith a supplier 'ho lets a $usto%er

bu# no' an! pa# later A "or%al $re!it $ar!%ust be $o%plete 'ith appli$ation7 heleal na%e o" businesses, leal o'ner, #earin business, in!ustr# SIC $o!e, I4 o"$o%pan#, nu%ber e%plo#ees, total revenuesper #ear, ban) re"eren$es, an! Sinatures o"the o'nersMo""i$ers o" the $o%pan# hen, a$re!it institution li$ense! 'ill $he$) the=ualit# o" #our $o%pan#Ns reputationthrouh pur$hase histor#, ban)inin"or%ation, overall "inan$ial health, an!

other !ata his $he$) 'ill be )ept$ontinuin %onthl# esi!es, I" Ar$hie'ants to be a$$epte! b# the supplier, the#%ust ensure the $ontra$t 'ith pa# on ti%ethe "ees an! interest 4i""erent suppliers 'illhave !i""erent ter%s an! $on!itions "or$o%pan# Ar$hie 'hen the# pa# tra!e$re!its I" Ar$hie uses suitable tra!e $re!its,

the# $an in$rease both the volu%e o"suppliers an! Ar$hie


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as)in "or loan "ro% #ou $o%pan# Can the#be truste!, is #our $o%pan# able to repa#(ie Dis it a pro"itable one an! are thereenouh spare pro"its to be able to a""or! theinterest an! the perio!i$ repa#%ent o"

portions o" the loan Course boo), 2;1*Further%ore, the ban) 'ant to )no' thepurpose o" the loan, repa#%ent ter% o" theloan are ver# sini"i$ant Spe$ial, the ban)'ill nee! so%e "or% o" se$urit# that it $anturn to i" #our $o%pan# $an not repai! (&ustli)e a %ortae

Finan$ial resour$es, abilit# to returnon invest%ent, !ivi!en!s per #ear areele%ents to help Ar$hie to attra$t an e=uit#investor 'hen the# sell shares hen an

investor bu#s Ar$hie


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ui$) attra$t investorsan! $apital to expan!rapi!l#

In short ti%e, Ar$hie

$an be expansion tobier 'ith "ast $apital

e$ono%i$ invest%entpro"essionals

+ot $ount overall"inan$ial an! in so%e

$ase, there are hihri$)s

$hanes, an! sol!his shares

nee! to ta)e ti%e tbe per%itte! "ro%the $o%petentauthorit# ut i" #o'ant =ui$)l#

invest%ent, this isoo! 'a# "or et "$apital

7u6$ic stoc+

mar+et

he $apital in$rease isnot li%ite! "ro% theinvestor

Ar$hie


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re!u$in the ris) to theissuer

In$rease in share $apital inthe "uture to %ove "ro%

bon! !ebt into e=uit#Sto$) pri$e !e$lines are not!ue to avoi! an in$rease inthe nu%ber o" shares on the%ar)et =ui$)l#

e"ore s'it$hin bon!s'ill not re!u$e the in$o%eo" the sharehol!ers "ro%issuin shares

Easier to raise $apital !ue

to the attra$tion o" beinable to s'it$h "ro% bon!sto sto$)s

K!ilute!K b# thein$rease! nu%ber o"shares outstan!in, ea$hshare 'hen it represents alo'er per$entae o"

o'nership in the$o%pan#

he results o" $onversion'ill re!u$e interest $osts,I,e, in$rease the taxablein$o%e o" the $o%pan#here"ore, $o%panieshave to pa# %ore taxes'hen $onvertin

the sale o" bon!s b# the en!o" its ter%, i" the pri$e "allsat the loss, the investor 'illre$eive less than the initialinvest%ent ($apital loss

ro"essional stresse! thatonl# invest in bon!s 'hen#ou have !etaile! a!vi$e,in$lu!in invest%entob&e$tives an! ris)toleran$e o" the $lient hasbeen thorouhl# revie'e!It is i%portant, investors%ust o'n an i!le "un!s (notto be use! !urin the ter%o" the bon!s su""i$ient to

provi!e "or the $ase o"$apital loss !ue to loss o"bon! pri$es Overall thebiest $onstraints is /0is%of price fluctuations1

C) Unit -5 /)a5 /)6%

Fro% intro!u$tion, beinnin $apital o" Ar$hie is :55;;;;; Ar$hie 'ant to raise their"inan$ial to :15;;;;; b# a!!in :5;;;; 3o'ever Ar$hie 'ant to )eep the $ontrol o" the$o%pan# here are t'o 'a# "or Ar$hie no', raisin $apital b# shares an! borro'in "ro%other sour$es I" Ar$hie $hoose the 'a# usin shares, an! still )eep the $ontrol, Ar$hie %usthave at less 5;P share o" $o%pan# or at less :85;;;; hen Ar$hie shoul! borro'(:5;;;;?:85;;;;Q 8-.....9)

Ta2 Ric+ :inancia$ costs

im#$ications

B! S(ares ro"its tax "ro% the"inan$ial sharesapprove! an! allinvestors are supporte!b# overn%ent b#

$oin$i!en$e tax

I" a sharehol!ers orinvestors bu# %orethan 5;P shares o"$o%pan#, Ar$hie 'illbe lost $ontrol (OC

o" publi$ sto$)%ar)et I" Ar$hie useprivate pla$e%ent, the#$an $ontrol the a%ounto" shares

4ivi!en! an! %one#servi$es "or )eepin theinvestor sta# "orinvest%ent

1.


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B! Borro*in hen Ar$hie borro'%one# "ro% ban) orother sour$es, the$o%pan# %ust pa# thetax, an! interest rate

!epen! on ban) loans

I" the $o%pan# is notoo! business, $an


16/20

? I" a $o%pan# are borro'in %ore an! %ore, tax 'ill be lo', it %a)e in$reasin%obilit# o" $apital an! labor , attra$t s)ille! 'or)ers an! %an# !i""erent sour$es hen pro"itbe"ore tax !e$rease, neither tax repa#%ent It %a)e in$rease the value o" a $o%pan#

? Shares7 hen a $o%pan# sell put %ore share into %ar)et, abilit# "inan$ial o" a$o%pan# 'ill in$rease be$ause shares %a)e in$rease $apital 3o'ever this also %a)e

in$rease tax o" $apital, pro"it a"ter tax 'ill !e$rease, so value o" the $o%pan# 'ill !e$reaseC) ith a $orporation , Sharehol!er has the %ost i%portant role "or the $o%pan# , the

role o" Sharehol!er %ore i%portant he Sharehol!er 'ho !ire$tl# $ontribute %one# to the$o%pan# to help $o%panies invest in the pro&e$t Appl# to Ar$hie $o%panies , so%esharehol!ers are unhapp# 'ith the interest rate o" !ivi!en!s I" the# "eel that the $o%pan#pa# the interest rate "or the ban) at . P an! 9 P "or short ter% an! lon ter% loan In "a$tthe# have onl# re$eive! * P !ivi!en! rate he# "eel the %one# the# $an et to %ore than *P , the# are a loss 3o'ever, i" #ou loo) at the table o" Ar$hie "is$al 2;1. , Revenue 'as :25 %illion , 'hi$h suests the $o%pan# is pro"itable , 'ith revenues o" non?neative , an!parti$ularl# Retaine! ro"it "or the #ear o" the $o%pan# is : *98,99; , 'hi$h this $on"ir%sthe $o%pan# is to invest in a parti$ular pro&e$t in the next #ear he# sho'e! us a lot o"%one# to )eep the s$ale o" lare pro&e$ts So until next #ear , %a)e sure the $o%pan# 'ill$ontinue to pro"it , an! * P !ivi!en! that %u$h %ore valuable 'hen $o%pare! 'ith . P an!9 P ban) interest rates So , a 'or! o" a!vi$e to sharehol!ers an! investors , $ontinue toinvest in $o%panies Ar$hie

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CONCLUTION

ith a &oint sto$) $o%pan# an! the ne' $o%pan# as Ar$hie, the e""i$ien$# is

essential As a $o%pan# in the "iel! o" ele$tri$it#, Ar$hie nee!s to attra$t %ore an! %oreinvestors e""i$ientl#, so $o%panies nee! to have spe$i"i$ business strateies, $reation o" trust'ith $usto%ers an! ne$) their sharehol!ers to $ontinue to sta# investe! hrouh the sale o"sto$)s, bon!s, ban) len!in, Ar$hie also nee! to $al$ulate to please sharehol!ers, in$reasinthe interest !ivi!en!s an! retaine! pro"its "or the $o%pan# to $ontinue investin in next #earo !o that, Ar$hie shoul! assess the situation throuh "inan$ial reports, up!ate! "ullin"or%ation to sharehol!ers, an! the pro%ises %a!e in $on&un$tion 'ith the !evelop%entrisin !ivi!en! rate "or sharehol!ers

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RE:ERENCES

1 Anon, 2;1* To 2xtend Trade $redit or 3ot To 2xtend Trade $redit. TOnlineAvailable at7 http7MMbe"oreitsne's$o%MbusinessM2;1*M;8Mto?exten!?tra!e?$re!it?or?not?to?exten!?tra!e?$re!it?2525666ht%lTA$$esse! 2. O$tober 2;1*

2 Anon, n!! business community. TOnlineAvailable at7 http7MMsaa$o%vnMtasMthitruontraiphieusaaTA$$esse! 2. O$tober 2;1*

* Anon, n!4ifference 5etween 267 and &'T. TOnlineAvailable at7 http7MM'''!i""eren$ebet'eennetMbusinessM!i""eren$e?bet'een?eo=?an!?&itMTA$$esse! 2. O$tober 2;1*

. Anon, n!2conomic 6rder 7uantity #odel (267). TOnlineAvailable at7http7MM'''rea!#ratios$o%Mre"eren$eManal#sisMe$ono%i$_or!er_=uantit#_%o!el_eo=ht%lTA$$esse! 2. O$tober 2;1*

5 Anon, n!2xtending $redit to 8our $ustomers. TOnlineAvailable at7 http7MM'''sbaovM$ontentMexten!in?$re!it?#our?$usto%ersTA$$esse! 2. O$tober 2;1*

6 Anon, n! h9 th:ng v;n bp lu?t. TOnlineAvailable at7 http7MM'''%o&ovvnMvbp=MListsM0nP2;bnP2;phpP2;lutM0ie'_4etailaspxVIte%I4Q28*5

TA$$esse! 2. O$tober 2;1*8 Anon, n!@ow 0aising $apital 'mpacts 8our inancial Statements. TOnline

Available at7 http7MM'''ia$pro"essionals$o%MbloM2;1;M;9Mho'?raisin?$apital?i%pa$ts?#our?"inan$ial?state%entsMTA$$esse! 2. O$tober 2;1*

9 Anon, n!Arivate Alacements. TOnlineAvailable at7 http7MM'''ro'$o$o%M$_entriesMprivatepla$e%ents1ht%TA$$esse! 2. O$tober 2;1*

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Anon, n! T!B $6#A2T'T'63. TOnlineAvailable at7 http7MM'''saavnMtu?!ienMax_$o%petitionM15.*2saaTA$$esse! 2. O$tober 2;1*

1; Anon, n! The 'mportance 6f inancial Alanning. TOnlineAvailable at7 http7MM'''pppnet'or)$o%MV

vie'Qhe_I%portan$e_O"_Finan$ial_lanninW%i!Q156*W%i!Q156*TA$$esse! 2. O$tober 2;1*11 Anon, n! United Kingdom (UK) C4A Cross 4omestic Aroduct. TOnline

Available at7 http7MM$ountr#e$ono%#$o%M!pMu)TA$$esse! 2. O$tober 2;1*

12 Anon, n! Day 4Ei @=n. TOnlineAvailable at7 http7MMni$ea$$ountin$o%M3>M*M*.1ht%lTA$$esse! 2. O$tober 2;1*

1* Anon, n! Day 3gFn h=n. TOnlineAvailable at7 http7MMni$ea$$ountin$o%M3>M*M*11ht%lTA$$esse! 2. O$tober 2;1*

1. Anon, n! Ghat is inancial Alanning. TOnlineAvailable at7 http7MM'''"inan$ialplanninoru)M'a#"in!erM'hat?"inan$ial?planninTA$$esse! 2. O$tober 2;1*

15 hatta, A, n!!ssumption of &'T. TOnlineAvailable at7 http7MM'''12%anae$o%M"oru%aspVQ&itWSQTA$$esse! 2. O$tober 2;1*

16 Foun!er, n! $hiHn lIJc &ust'nTime (&'T) lE mt %h>i ni9m trong s


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2* Anon, 2;1*#ap of $D#s &'T !rchitecture. TArt

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