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Managing Financial Resources and Decisions

Assignment-1

Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................2
1.1 Sources of Finance.....................................................................................................................3
1.1.1 Business Finance.................................................................................................................3
1.1.2 Range of Sources to Montezuma........................................................................................4
1.1.3 Other ways of borrowing....................................................................................................4
1.2. The implications of the different sources of finance................................................................5
1.3. Appropriate sources of finance for Montezuma.......................................................................7
1.3.1. The expansion business from Sole-Trader to Partnership..................................................7
1.3.2. The expansion business from Private to Public Limited Company...................................8
2.1. The costs of sources of finance for Montezuma.....................................................................10
2.2. Explaining the Importance of financial planning....................................................................11
2.2.1. Financial planning............................................................................................................11
2.2.2. Importance of Financial Planning....................................................................................11
2.3 The information needs of different decision markers..............................................................12
2.4. The impact of finance on the financial statements.................................................................13
Conclusion.....................................................................................................................................14
Reference List................................................................................................................................15

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Report
Montezuma Pvt. Ltd
To

: Ron

From

: Student Money related Trainee Financial Controller

Date

: 15.5.2015

Subject
: AssessingEvaluating the diverse wellspringsdifferent sources of fund properfinance
appropriate to the extensionexpansion stage
Official outline

Executive summary
I am recently selected Learner Money related Guidenewly appointed Trainee Financial Advisor in a
Mexican Eatery;Restaurant; I am composingwriting a report to Mr. Ron, assessing evaluating the
distinctive wellspringsdifferent sources of fund suitablefinance appropriate to firestart up stage and its
development organize moreover.expansion stage also. The report ought to should address the
accompanying errandsfollowing tasks and issues:
Firstly, I distinguishidentify and depictdescribe the different wellspringsvarious sources of fund
accessiblefinance available to Mexican eatery. Besides, restaurant. Secondly, I evaluateassess the
ramificationsimplications of the distinctive wellspringsdifferent sources of moneyfinance to Mexican
eatery identified with danger, lawful, monetaryrestaurant related to risk, legal, financial and
weakeningdilution of control and insolvency.bankruptcy. Thirdly, I select proper
wellspringsappropriate sources of fundfinance for Mexican eateryrestaurant and make
proposalsrecommendations on the most ideal methods for best ways of raising account.finance.
Fourthly, I evaluateassess and contrast different expenses included and every wellsprings of money
compare various costs involved with each sources of finance to Mexican eatery Restricted. At
last,restaurant Limited. Finally, I clarifyexplain the significanceimportance of monetary making
arrangementsfinancial planning for Mexican eatery. restaurant.
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Presentation

Introduction
Montezuma Pvt. Ltd is New Mexican eateryrestaurant that has quite recently just been built up
established by Mr. Harry Wong and Mr. Ron Douglas. In spite of the fact that organizationAlthough
company has not gone to beneficial exercisesproductive activities but rather organization company
has plan to create produce and market the new channel. Later on,filter. In the future, Montezuma
hopesexpects to make huge interests significant investments in deals, deals backing, and item
improvement work force.sales, sales support, and product development personnel. This will include
buying extra apparatusinvolve purchasing additional machinery and hardwareequipment to
deliverproduce quality channels what's morefilters in addition staff preparing.training. The most
essential important thing with the organizationcompany is capital.
Budgetary arranging is essentialFinancial planning is very important with Montezuma in light of the
fact thatbecause if the organization doesn'tcompany doesnt plan to utilize use capital, it can be
bankrupt. It will be saidmentioned about influents of deficienciesshortages and surplus to the
organizationcompany in this report. We are going to talkdiscuss about this organization wellsprings
of money, budgetary choices, accountcompany sources of finance, financial decisions, finance as a
source, and monetary executionfinancial performance in this exchange. discussion.

1.1 WellspringsSources of Fund Finance

1.1.1 Business Fund Finance
FundFinance is key essential for a business'businesss operation, advancement and extension.
Beginning an eaterydevelopment and expansion. Starting a restaurant business is not a simple
assignment,n easy task, as there are number of eateriesrestaurants that have been opened and these
eateries contendrestaurants compete with one another amazingly.each other incredibly. I chosedecided
to run Mexican sustenance eateryfood restaurant which will include an alternateadd a different dishes
of nourishmentfood to the conventional nourishmentstraditional foods menu and it will cook
prevalentcater superior quality sustenance.food. The eateryrestaurant business is famously
intensenotoriously tough as it obliges enormous requires huge number of operations in it to be
completed. At first carried out. Initially I will open an eatery restaurant on rent.
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The aggregate Venturestotal Investments will be 250,000 give or take approximately as it will take
care of alternate expenses cover the other costs which may incorporate include the accreditation
expenses certification cost and getting permitlicense for running. The Working capital will require
need by the business (e.g. CrudeRaw Materials), StipendAllowance for sumsamounts that owed by
clientscustomers once offersale of Mexican eatery startsrestaurant begins and the
DevelopmentGrowth and advancementdevelopment (e.g. additional interest extra investment in limit).
Wellspringscapacity). Sources of financed can be named Inward and Outside, Transientclassified as
Internal and External, Short-term and Long haul-term or ValueEquity and Obligation.Debt. The
conceivable wellsprings of account accessiblepossible sources of finance available to a business are;
1.

On hand shareholder and chiefs stores directors funds

2.

Family and Companions Money related Backing Friends Financial Support

3.

Clearing Banks (Business Overdrafts, Term Advances) Loans)

4.

Loans from Business supporting associations organizations

5.
Business Holy messengers (www.businessangelnetwork.co.uk/national-business - heavenly
attendants system)
1. 6.

Business Angels (www.businessangelnetwork.co.uk/ national- business -angels-

network)
Community Advancement Account AffiliationDevelopment Finance Association (CDFA www.findingfinance.org.uk)
7.
Business Financing Organizations (www.businessfinanceforyou.co.uk) Institutions
(www.businessfinanceforyou.co.uk)
8.

Hire purchasebuy and renting leasing

By striking balance in the middle of value and riskequilibrium between equity and liability it is
guaranteedensured that subsidizing funding structure suits the business. These are the
wellspringssources of accountfinance that are accessibleavailable for running Mexican eatery.
restaurant.
1.1.2 ScopeRange of Sources to Montezuma
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Harry Wong has secretly createdprivately developed to offer widebroad range Mexican wines and
with his partner colleague Ron Douglas has numerous createdmany developed experience for coddles
the greater partcaters to all of its clientscustomers by giving as per every clientproviding according to
each customer taste, down to the littlest point of interest. With a specific end goalsmallest detail. In
order to do this, the organizationcompany can have private source, for example, individual sparing,
such as personal saving, credit unions, accomplices and so forth. Be that as it may, the
organizationpartners etc. But the company has some other accessible wellspringsavailable sources of
fund. finance.
For Montezuma, the wellspringssources of account finance are openaccessible in connectionrelation
with Sole merchants, organizationtraders, partnership and Constrained organizations.Limited
companies. Sole dealertrader is for the most part includedmainly involved in running of
organizationscompanies and needshas to manageafford the cost of the fundingcapital to beginstart the
business. At that point, benefits Then, profits of business are just all for sole merchant.trader. As the
sole dealer,trader, Montezuma can discoverfind the fundfinance sources by obtaining cash borrowing
money from the Bank, Business Blessed messengersAngels and by making deals.sales.
Firstly, being the sole broker,trader, own capital cash money is the suitable approachway to
beginstart the business. After that, we can useexpend to maintain run the business by getting
cashborrowing money from the banks and accepting cashreceiving money from financial
speculatorsventure capitalists with business foundation picture.background image. In the same
cases, Montezuma can utilize alternate methods for getting use the other ways of borrowing as the
above displayed. presented.

1.1.3 Different methods for obtaining Other ways of borrowing

OrganizationPartnership is the sorttype of connectionrelation that is the collaborationcooperation of
two or more persons with the same planaim to get benefitsprofits on the same business. Association
sortPartnership type of connection doesn't relyrelation doesnt depend on upon laws. It
specificallydirectly upon on simply just their own assentionsagreements and after that
acknowledgesthen accepts the proportionratio of understandingagreement shares. In the event that If
Montezuma maintainrun the business in the connectionrelation of association,partnership, the
wellspringssources of money finance is for the most partmainly from the accomplices'partners own
capital then we can get borrow from the bank effortlesslyeasily as the business sufficiently huge.
Additionally, alternate methods for acquiring, for example, Considering, Renting, Contract obtaining

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etc. large enough. Moreover, the other ways of borrowing such as Factoring, Leasing, Hire
purchasing and so on.
OrganizationCompany is the sorttype of business that worksoperates with more than two individuals
taking into account lawfulpeople based on legal laws. Its control on the organizationcompany is
change relyvary depend on upon the offer sumsshare amounts on that business. The
organizationcompany law is that 51% of offer proprietorshare owner can control the
organizationcompany and that proprietorowner is more intensepowerful than others. As
Montezuma, in the event that if we maintainrun the business with the organization sort,company
type, we can pick upgain the wellspringssources of accountfinance by offering standardselling
ordinary shares to open.public. Being the organization sort,company type, we can acquire cash
borrow money from the bank, from financial speculators simplerventure capitalists easier than
association sort.partnership type. In the same way, we can gain cashearn money from considering,
receipt reducing, rentingfactoring, invoice discounting, leasing and Contract buyingHire purchasing
upon the needs and prerequisitesrequirements of organization. Along these lines,company. Thus, as
above actualitiesfacts Montezuma ought to maintainshould run the business inside of organization
connection in light of the fact that within company relation because it is more suitable than others
and it can transferupload the wellspringssources of money effectively. finance easily.
1.2. The ramificationsimplications of the distinctive wellspringsdifferent sources of money
finance

WellspringsSources of money impact finance influence the business operations as it were.to a great
extent. It is extremely advantageousvery convenient to obtainacquire the trusts yet funds but once the
business does not work according to arrangingoperate as per planning the impactinfluence and the
weightpressure of procured assets increment to a disturbingacquired resources increase to an alarming
state. The expensecost of storesfunds and their weight unbelievably exasperateburden incredibly
disturb the business operations. On a very basic level, Fundamentally, business may gain finances
acquire funds either from obligationdebt financing or valueequity financing. The expensecost of
valueequity financing is profit installmentsdividend payments which mean less held income. In the
event that retained earnings. If a business goes for the choiceoption of obligationdebt financing the
expensecost of obligationdebt financing will be intrigue installmentinterest payment which
impliesmeans less working payoperating income and high influence. leverage.
Consequently,Therefore, the control of the business will go into the hand of loan bosses.creditors.
The right blendcorrect mix of the money relatedfinancial structure will be useful beneficial for the
business. At the point when new companies When start up businesses is started, without a doubt the
money relatedinitiated, the absolute financial structure will come aboutresult the achievementsuccess
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of the business. There are numerous approaches to discover the obligations. Charge conclusionsmany
ways to find the debts. Tax deductions are the huge considerationenormous attention for
obligationdebt financing. In this way,So, we can acceptassume that essentialprincipal and interest
installmentspayments for a business advanceloan as costs of doing business. expenses.
OfferingSelling the debentures
The strategymethod is most effortlesseasiest to get cash yetmoney but the offer accomplice share
partner own over half organization offerabove 50% company share or debentures; different
accomplicesother partners can reach under that individual.person. Debentures is an obligation debt
or may be known as acquired cashborrowed money and is like Offer withsimilar to Share except for
the exception of the wayfact that the cash picked up money gained by issuing debentures is not an
earning but only a winning but rather just an obligationdebt which the organization needscompany has
to pay back or possiblyat least pay the enthusiasminterest on the sum gotamount received per
debenture. Debenture holders not at all like offerunlike share holders don't not have a privilege
right to vote yetbut can en-en-cash the money the cash loans wheneverlends at any time since the
overall revenuesprofit margins are verging on settled. If there should arise an occurrence of offeralmost
fixed. In case of share capital the position of an organization company in the business market is not
generally always the same. An offer share holder musthas to be up and comingto date for the present
circumstancecurrent situation and future patternstrends of the organizationcompany whose shares he
purchases.buys. In case the event that the organizationcompany is relied uponexpected to go in
misfortuneloss the shares can be sold at a lessening cost.
reducing price.
Issued OfferShare Capital
Issuing conventionalordinary shares is presentlynow being utilizedused by numerous
organizations many companies when they needwant to extendexpand business or pay for
venture.investment. Yet it is not straightforwardsimple for an organization company to issue
conventionalordinary shares without precedent for the first time in Mexican. NormalOrdinary
shareholders have the benefitprivilege of acceptingreceiving a piecepart of organization benefits by
means ofcompany profits via dividends which is in light ofbased on the estimation value of shares
held by the shareholder and the benefitprofit made for the year by the organization.
Organizationscompany. Companies can issue standardordinary shares keeping in mind the end goalin
order to raise money finance for long haul budgetary-term financial needs. InclinationPreference
shares are another sorttype of shares. InclinationPreference shareholders get an alteredreceive a
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fixed rate of profits dividends before the customary shareholderordinary shareholders are paid.
Montezuma should try to raise fund for expansion by issuing preference share because it is easier to
deal with control dilution and dividend payment method arrangement.
Borrowing from the bank
Banks can be good sources of funding. For small ventures, business may be able to secure a
personal loan or loan of credit, for longer operations, business may be able to leverage assets-large
industry or equipment by using them as collateral to secure the loan. If the company borrows money
from the bank, it enables to keep the cash on hand to use an operating capital or for personal survival
drawing a down period in business. Additionally, if business goes bad, it can negatively impact on
business that can become bankruptcy. And then, need to pay interest on the loans. The amount of
payment will be due on the time regardless of whether the business is bad or good.
For Montezuma, to expend the business Montezuma has various ways to find the sources of
finance. But, Montezuma should think about the taxes by choosing the finance source.

1.3. Appropriate sources of finance for Montezuma

1.3.1. The expansion business from Sole-Trader to Partnership
A sole trader is an individual in business. Generally sole traders businesses are small with their
own name. It is the most common organization. The available sources for sole trader are: personal
saving, working capital, borrowing money from the Bank, Business Angel and by making sales.
These changing efforts tend to partnership be more successful when requests deal with issues
of high national priority and when an explanation is provided as to how the additional resources will be
used. Extension organizations are supported financially from a variety of sources. Publically funded
organizations receive support from: Bank Overdraft, Venture Capitalists, Leasing and Hire
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Purchasing. The advantages and disadvantages of sources of finance to support expansion business
sole-trader to partnership are;

Sources Of
Finance
Personal
Savings
Loans
Bank overdraft
Hire purchase
Lease

Venture capital

Advantages

Disadvantages

to lend money to the business.

not an option where very large-amounts

carry a lower rate of interest or free

Large amounts can be borrowed.

of funds are required.

Interest is charged.

Suitable for long-term investments.

Ideal for short-term cash flow deficits.

Loans effect on companys gearing ratio.

Interest is variable rate and daily paid

Easy and quick to arrange.

Bank charges an overdraft fees.
Asset can use before its paying in full. Owner as lender until last payment
Instalments plan & taxable income
Asset payments are only for the usage

Asset cost is more than the original

Finance lease provided to buy the asset

Lease obtain easier than commercial loan

Invest large sums of money

If pay than value, the lessee will ends

Profits shared with the investor.
As venture capitalist influence by
strategic decisions and control

bring a lot of experience and expertise

1.3.2. The expansion business from Private to Public Limited

Company
Although the sole trader route, which is commonly referred to as being self employed, is the
most popular way of running a business, there are significant advantages and disadvantages of
operating as a limited company. Varying in size from small own businesses to large PLCs.
The other source of finances can be available for company expansion from private to public.
The term debenture is a strictly legal term but there are other forms of loan or loan stock. A loan is for
a fixed amount with a fixed repayment schedule and may appear on a balance sheet with a specific
name telling the reader exactly what the loan is and its main details.
Short-terms loans, long-term loans
Have to pay the interest.
Need to regulate the period interest of loan can be high when organization getting profit
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but when organization is not getting profit, itll be expansive.

Need to offer assets or property for the security purpose.
In either type of company, the owners are called shareholders because they share the
ownership and share the profits of the good times and the losses of the bad times. Once they have paid
in full for their shares, the owners face no further risk of being asked to contribute to meeting any
obligations of the business. Hopefully, the business will prosper and the owners may be able to receive
a share of that prosperity in the form of a cash dividend. A cash dividend returns to the owners, on a
regular basis and in the form of cash, a part of the profit created by the business.
Share Issue is the sources of finance suitable for a limited company. The advantages of share
issue are; it doesnt have to be repaid and no interest is payable. The disadvantages are; Profits will be
paid out as dividends to more shareholders and ownership of the company could change hands.
Ordinary shares are usually offered to anyone who wants to buy (public). People buy share because
they want to receive the dividends when company make profits. Yet ordinary share does not guarantee
someone who owns it a constant dividend every month. Besides, ordinary share could be exchanged
between people without any regulations.
Preference share which provides a specific dividend that is paid before any dividends are paid
to ordinary holders, and which takes precedence over ordinary share in the event of liquidation.
Preference shares represent partial ownership and pay a fixed dividend that does not fluctuate, although
the company does not have to pay this dividend if it lacks the financial ability to do so. The main
benefit to owning preference shares are that the investor has a greater claim on the company's assets
than common stockholders. Preferred shareholders always receive their dividends first and, in the event
the company goes bankrupt, preferred shareholders are paid off before common stockholders.
Borrowing from the Bank can be another good source of funding for the small business. The
core advantage of borrowing is that it enables us to keep our cash on hand and use it as operating
capital for the down period of the business. If the situation of the business is not good, bankruptcy can
be declared for saving most personal assets.
One of the peak disadvantages to bank loans is that they are very tricky to obtain unless a small
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business has a considerable track record or valuable collateral such as real estate. The disadvantage of
acquiring bank loan is interest payment which will increase the leverage of the company and loan
payment will become due unless its full amount is not paid. Interest rate for bank loans is usually high
for the start up business.
Finally, I have to verify the fitting source of finance for my business as New Mexican
Restaurant Company. The answer for my financial support seems to be included in the way I choose
type of ownership.In this case, borrowing from the bank is the best way out because of its suitability for
confirmed ownerships type as a private limited based company. The most appropriate source of
finance for Montezuma; such as selling the debentures, ordinary shares issued, Preference Shares
issued and Borrowing from the Bank.In either case, For Montezuma, their aim is the middle-to
higher-income local market area residents and tourists.So, Montezuma just needs to run the business as
private limited companies because it already has the interest of regular royal customers, a strong
market and mild competitive climatein the state of Queensland.

2.1. The costs of sources of finance for Montezuma

In Montezuma can use above the ways; there can be the cost of lending money, share-capital,
retained earnings and bank loans. The cost of debt financing (loans) is interest. The cost of equity
financing (investments) could include dividends or a share of the profits. Comparing the two may
involve a cost of capital calculation and analysis. We would in effect compare the interest charges on a
loan with the percentage of our companys retained earnings or accumulated profits that really belong
to the investor.
If we use the bank loan for Montezuma, interest is the main cost. If we take out a loan of
$100,000 and pay 13% interest, the cost $13,000 per year and we need to pay regularly for interest.
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Apart from this, we use the other ways of borrowing, we need to pay high interest rate more than bank
loan interest rate.
If we can obtain loans from different banks, compare the interest rates and payment terms they
offer. To determine the total interest cost over the life of each loan to have a comparable base. Small
differences in the interest rate can add up to significant amounts over a long-term loan. Keep in mind
that short-term unsecured loans, such as lines of credit, generally carry a higher interest rate than longterm secured loans, such as mortgages.
Debentures have to be paid a fixed or floating interest depending on the type of debenture that
is issued. Debenture interests are treated as expenses and charged against profits in the profit and loss
account. Debentures can be redeemed when the company has surplus funds.
Ordinary and Preference shares - Dividends has to be paid out of profits to shareholders as a
return for their investment in the business. There are administrative costs occurring from issuing shares
like stock exchange listing fee, printing and distribution fee and advertising fee.To the owners of a
company ordinary shares are issued. They have a nominal or 'face' value, naturally of $1 or 50 cents.
There is no relationship between the market value of a quoted company's shares and their nominal
value, but when ordinary shares are issued for cash, the nominal value of the shares must be equal to
the issue price or less than issue price.

2.2. Explaining the Importance of financial planning

2.2.1. Financial planning
It is a process in which in order to meet the goals the present financial situation and the
modifications in the spending pattern presents before a person, organization or even a country.

2.2.2. Importance of Financial Planning

For obtaining enduring profits through the assets available, it is significant to plan finances.
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Through financial planning the investments are structured suitably and handled by experts. If an
appropriate plan is developed in advance, every decision concerning our finances can be supervised.
The importance of financial planning is explained in the following points.
Cash Flow: To increase cash flow and monitor spending financial planning helps. By
undertaking actions the cash flow is increased like- tax plan, careful expenditure and prudent budget.
Capital: With the help of professional financial planning a strong capital foundation can be
built. Therefore, one can consider about investments and by this means develop his financial situation.
Income: Through planning it is possible to control income efficiently. For separating income
into tax payments, other monthly spending and savings managing income helps.
Family Security: In the viewpoint of family security financial planning is essential. For the
intention of financially securing the family, various policies existing in the market are serving.
Investment: A good financial plan helps in choosing the proper investment policy, which
considers the income and spending of a person. It facilitates the person to achieve the set goals.
Financial is one of the most important parts of the business. Therefore, all the company need to
create their financial planning at the end of the year. If the company ignores that, company can get
many disadvantages seriously. As the successful company, Montezuma needs to make their financial
planning and try to get their perspective goals and mission.

2.3 The information needs of different decision markers

Information is needed to the different parties involved with the business for making financial
decisions. The decision makers in sole proprietorship business and their information needs are
explained. Accounting information helps users to make better financial decisions. Users of financial
information may be both internal and external to the organization.
Internal users (Primary Users) of accounting information include the following:
Owner: The main user of business information. He prepares plans and formulates strategies
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according to the business information. To analyze the viability and profitability of the
investment and to determining the future course of action, information is required by an owner.
Management: for analyzing the organization's performance and position and taking appropriate
measures to improve the company results.
Employees: for assessing company's profitability and its consequence on their future
remuneration and job security.
Accounting information is presented to internal users usually in the form of management accounts,
budgets, forecasts and financial statements.
External users (Secondary Users) of accounting information include the following:
Creditors: for determining the credit worthiness of the organization. Terms of credit are set by
creditors according to the assessment of their customers' financial health. Creditors include
suppliers as well as lenders of finance such as banks.
Tax Authorities: Another user of business information. To determine the credibility of the tax
returns filed on behalf of the business, authority requires financial information.
Investors: The investors analyze the feasibility of investing in the business at first. They look
forward to ensure a reasonable return on their investment before they commit any financial
resources to the business. For that investors require relevant information.
Customers: for assessing the financial position of its suppliers which is necessary for them to
maintain a stable source of supply in the long term.
Regulatory Authorities: for ensuring that the company's disclosure of accounting information
is in accordance with the rules and regulations set in order to protect the interests of the
stakeholders who rely on such information in forming their decisions
External users are communicated accounting information usually in the form of financial statements.

2.4. The impact of finance on the financial statements

Financial statements keep record of a businesss trading year (Trading, profit and loss account)
and show the financial position of a business as at a date (Balance sheet). Obtaining finance from
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different sources bring about a change in the financial statements. This portion of the report
investigates how each source of finance is recorded and affects the financial statements.
Types of
Financial Sources

Cash Flow

Profit & Loss

Account

Loan

Increase in Cash
Inflow

Interest charged is
depend on Loan

- Increase in Longterm Liabilities

Debenture

Increase in Cash
Inflow

Interest paid on
regular basis

- Increase in Longterm Liabilities

Issue shares

Increase in Cash
Inflow

Balance Sheet

Financial

Dividend will be
- Increase in Share
paid
Capital
Overdraft fee and
Decrease in Cash
- Increase in Current
Interest paid on
Bank Overdraft
Outflow monthly
Liabilities
regular basis
statements preparation as well as overtrading is very important element that included in Montezuma
PLC, Mexicans financial planning. Overtrading occurs when the company is too hasty in expanding
businesss operation. If a company becomes overtraded, it is likely to face up with liquidity problems
and running out of working capital. Business sale will increase in profit and loss account, but in a
period of inflation. Therefore, the amount of cash and bank will decrease considerably in the balance
sheet.
Excessive borrowing concerned with the company has high liabilities banks and other potential
lender. There will be increase in cash flow and a balance sheet will usually correspondingly and the
interest charged on the loan. The interest charged in the profit and loss account. This might lead to the
collapse and liquidation of the company.
As a result, financial management is very important for Montezuma PLC, Mexican to prevent
unexpected severe condition to companys finance.

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Conclusion
Here this is my report for Montezuma Pvt. Ltd. It is mention about different resource of capital
that Montezuma can use to improve. It is important to choose an appropriate and cheap source of
finance for the smooth operation of the firm. There are important factors to consider when choosing a
source of finance. However further work need to done. Each method has advantages and disadvantages
I suggest to Montezuma and the company must try to get the bank loan first. And then it can expand
and pay the salaries for the employees.
It is strongly believed that, depend on situation of company at the moment, Mr. Harry Wong and
Mr. Ron Douglas should choose change to private limited companies.Montezuma must wisely deal
with some problems from the first step of finding proper source of finance for the company such as
risk, dilution of control, financial, legal, and bankruptcy. Besides, financial planning is also very
important to the company when building cash flow budget and choosing suitable option to raise money
for business expansion. I can tell sure, if the company try to check daily income and make sure profit
and loss account for a business, the logistics will be rotated well. Montezuma PLC is an expected
company with positive prospective in future to grow, gain market shares in Mexican market.

Reference List
BPP (2004), Managing Financial Resources and Decisions. 1st ed, Great Britain: W M Print.
En.wikipedia [online] Venture Capital available from
[http://en.wikipedia.org/wiki/Venture_capital] [accessed May 11, 2015].
Financial dictionary (2009) Financial Planning [online] available from [http://financialdictionary.thefreedictionary.com/Financial+planning] [accessed May 12, 2015].
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Find articles (2009) [online] available from

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