The paper 'Sources of Finance both Long Term and Short Term" is a great example of finance and accounting coursework. Sources of capital or finance to fund any business is the hardest thing in the execution of any corporate business and also to any start-up business, it is therefore very important for any individual to find any means that could fund the business in order to achieve its financial goals either in the present or in the future. Some of the most frequently used long term means in which many organizations use to fund business include capital market (Kieso and Weygandt, 15-71).
The capital market as defined is an arrangement in which the transactions which include the procurement and supply of the known as long term funds is carried out among individuals and organizations in the business (Virginia Clark, 201-300). In order to rise the long funds using the capital market, the companies raise the funds using issuing of the share and debentures of different types. The transaction of issuing the shares and debentures these transactions are said to take place in the market and new capital is raised either for the starting up companies or existing ones.
But this particular business of selling and buying of shares takes place in another market which is called the stock market (Hudson, 1-80). The individual or organizations which contribute to the share capital of any company trying to raise funds by issuing shares and debentures to the market become the shareholders of the company. This critical group can also be known as members of the company (Hudson, 1-80). Before a decision is made to for the company to issue the shares the leadership of the company has to reach on an agreement concerning the following issues including the amount of capital to be raised, the type of shares that the company is going to issue and finally the time that the company is going to issue the shares.
The government control the way in which shares are issued by the companies (Kieso and Weygandt, 15-71). Special financial institutions have that have been set up either by the government or by the non-governmental organizations help in rising long term finances for the companies or the industrial enterprises, these particular organizations provide great assistance to the staring up companies and also the existing once to raise the needed finances in order to advance the goals of the company (Hudson, 1-80).
In Japan for example; there are institutions such as industrial finance institutions of India, at a national level there are state corporations that give loans to the developing companies to advance their vision (Hudson, 1-80). These particular state corporations and the national institutions are also known as development banks, apart from the development banks that are highly reliable there are the investment companies also known as investment trusts.
These particular institutions subscribe to the valued shares and debentures that are offered by the companies that need the capital (Beaney; Lasher, 250-400). Leasing of companies is also another way in which companies in need of finance get the help that they need. Most of the manufacturing companies can manage to confidently secure long term funds by leasing other companies, to concur with this reason than the two campaniles should come up with an agreement that allows the leasing company to purchase and own the plant, machinery, and the fixed assets that the company that is being leased owns for a period of time in which the company pays (Kieso and Weygandt, 15-71).
At the end of the period in which the company is allowed to use the property the company too can have an option of purchasing the properties at a lower price. The lease rent always includes interest that is beside the expenses and profits of the leasing company (Beaney; Lasher, 250-400).
Beaney, Shaun. "Defining corporate finance in the UK". Washington DC: Corporate Finance Faculty, ICAEW,, 2005:250-400.
Damodaran, Aswath. Strategic Risk Taking: A Framework for Risk Management. New York: Wharton School Publishing, 2007:25-47.
Hudson, G. Lane and J. Symanowitz. "A Practical Application of an Economic Optimisation Model in an Underground Mining Environmen. New York: New York Times, 2004:1-80
Kieso, Donald E. and Jerry J. & Warfield, Terry D. Weygandt. Intermediate Accounting . New York: John Wiley & Sons., 2007: 15-71.
Lasher, William. Practical Financial Management. New York: South-Western College Publishers, 2010.
Virginia Clark, Margaret Reed, Jens Stephan. "Using Monte Carlo simulation for a capital budgeting project,." Management Accounting Quarterly (2010): 201-300.