Financial Planning And Budgetary Choices : Sainsbury 's Supermarket

790 Words Jun 30th, 2016 4 Pages
Sources of finance are very important in all activities that have a purpose to make profit. Funds are essential to a business, grow an existing one, raise the working capital, obtain fixed assets, add a new product on the market, reimburse loans or pay any other obligations. This report presents some different sources of finance, accessible in this case to Sainsbury’s, advantages and disadvantages of those, financial planning and budgetary choices. Sainsbury’s supermarket is the longest standing major food retailing chain in the UK. Was founded in 1869 and today runs over 1200 supermarkets and convenience stores.
1.1 Identify the sources of finance available to a business

“The financial resources are the money available to a business for spending in a form of cash, liquid securities and credit lines.” (Business Dictionary, 2015)
There are different financial needs:
Long term finances. Businesses need long term financing for purchasing new equipment, organization extension and income upgrade. The methods for long term financing are as per the following: sale of assets, share capital, mortgages, bank loans, leasing, debentures, venture and grant
Short term finance. This type of finance, lasting for one year or less, is to increase inventory orders. Short term financing contains the following financial instruments: trade credit, credit cards, leasing, bank loan and bank overdraft.
Financial sources can be additionally grouped in: internal sources and…

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