Accounting and Financial Management Questions – Assignment Example

Download full paperFile format: .doc, available for editing

The paper " Accounting and Financial Management Questions" is a great example of an assignment on finance and accounting. Financial Management - MBA Question No. 1 What are the commercial issues facing a finance manager in an SME when borrowing from a bank? Answer No. 1 Small and Medium-sized Enterprises or SMEs “ A stipulation of the European Regional Development Fund Grant is that potential beneficiaries are, amongst other things a Small to Medium-Sized Enterprise. SME’ s are companies that employ less than 250 people, have a turn over of less than € 50 million (or a balance sheet total of less than € 43 million), and not more than 25% owned by a non-SME” . LPDU – Glossary [Online] www. comp. lancs. ac. uk/engineering/lpdu/Glossary. htm (Accessed December 23, 2005) “ The EU Member States traditionally had their own definition of what constitutes an SME, for example, the traditional definition in Germany had a limit of 500 employees, while (for example) in Belgium it could have been 100.

But nowadays the EU has started to standardize the concept. Its current definition categorizes companies with fewer than 50 employees as "small", and those with fewer than 250 as "medium” . In most economies, smaller enterprises predominate.

In the EU, SMEs comprise approximately 99% of all firms and employ between them about 65 million people. SMEs, in contrast to big business, have a reputation for innovation. For this reason, and because of their difficulties in attracting capital, national and regional fostering of SMEs commonly occurs” . Small and Medium-sized Enterprise - Wikipedia, the free encyclopedia [Online] http: //en. wikipedia. org/wiki/Small_and_Medium-sized_Enterprise (Accessed December 23, 2005) “ Debt appears to be the most important source of external SME financing. Today, The sheer magnitude of debt as a source of SME financing suggests that it is critical that we understand how financial intermediaries and trade creditors make credit decisions and that we understand which firms get financing and which firms do not. In addition, it is important to understand that there are many powerful commercial factors and issues that determine the relative importance of lending technologies. These factors likely include the status of a country’ s commercial laws and their enforcement, the development of a country’ s information infrastructure, the efficiency of a country’ s bankruptcy system, the vibrancy of a country’ s community banks, the market structure of the banking system, the presence, and importance of non-bank lenders, and the level of development of country’ s capital markets.    

References

Chapter 13, ROIC and WACC [Online]

http://216.239.59.104/search?q=cache:x2nnemf_v3MJ:flash.lakeheadu.ca/~pgreg/assignments/3019chapter13_w05n.pdf+WACC+calculations+issues&hl=en (Accessed December 23, 2005)

LPDU – Glossary [Online]

www.comp.lancs.ac.uk/engineering/lpdu/Glossary.htm (Accessed December 23, 2005)

Small and Medium-sized Enterprise - Wikipedia, the free encyclopedia [Online]

http://en.wikipedia.org/wiki/Small_and_Medium-sized_Enterprise (Accessed December 23, 2005)

Not Available [Online]

http://www.kelley.iu.edu/finance/workingpapers/SME.Lending.IU.Working%20Paper.Udell.3.4.04.pdf (Accessed December 23, 2005)

Van Horne and Wachowicz. Fundamentals of Financial Management, 10th Edition. Prentice Hall.

Gallagher, and D. Andrew. Financial Management – Principles and Practice, International Edition. Prentice Hall.

Download full paperFile format: .doc, available for editing
Contact Us