Question

In: Finance

“The most appropriate financing pattern would be one in which asset buildup and length of financing...

“The most appropriate financing pattern would be one in which asset buildup and length of financing terms is perfectly matched.” Discuss the difficulty involved in achieving this financing pattern.  

Solutions

Expert Solution

Finance is one of the most important and fundamental area for any firm, as we all know finance is the life blood of business, using finance most effectively is in hands of finance team and the their leader known as finance manager. Financial pattern is like blue print, which shows how money flows in and out from business. If finance manager and his team are with deep knowledge, experience and can think from many aspects with different timings may design pattern in which asset buildup and the length of financial term is perfectly matched.

For that manager must know about all the current and fixed assets available with the business and also should have knowledge about long term and short term finance availability, this is difficult to know the availability of short term and long term finance with business in any specific time duration in future, and for what time it is available in business, because many uncertainties are there with business and on other hand it is not possible to change structure of debt and equity ratio continuously to meet current demands.

So above are some difficulties involved in pattern where assets buildup and length of financing terms are perfectly matched.


Related Solutions

For which of the following firms is debt financing most appropriate? a biotech company whose breakthrough...
For which of the following firms is debt financing most appropriate? a biotech company whose breakthrough drug will not be approved for the next 10 years a small oil and gas exploration company facing trouble due to falling gas prices Silicon Valley tech startup with no revenue a large, mature industrial conglomerate
Describe a source of debt financing, and discuss when this type of financing would be appropriate...
Describe a source of debt financing, and discuss when this type of financing would be appropriate for a small business.
Which one of the following is the most appropriate description or categorization of Lloyds of London?...
Which one of the following is the most appropriate description or categorization of Lloyds of London? Select one: a. Admitted lines insurer b. Cooperative insurer c. Insurance exchange d. Surplus lines insurer
Which of the following would be most detrimental for cellular respiration? That is, which one would...
Which of the following would be most detrimental for cellular respiration? That is, which one would result in the greatest reduction in the number of ATP molecules being generated? Select one: a. A strong reducing agent which is only active in the inter-membrane space of mitochondria b. A strong oxidizing agent which is only active in the mitochondrial matrix c. A strong reducing agent which can enter the cytoplasm but not the mitochondrial matrix d. A strong oxidizing agent which...
Explain which research paradigm would be the most appropriate. sustantiate your answer
Explain which research paradigm would be the most appropriate. sustantiate your answer
Which of the pH indicators from the following table would be most appropriate for the titration...
Which of the pH indicators from the following table would be most appropriate for the titration of 100 mL of 0.30 M acetic acid (Ka = 1.8 x 10-5 ) with 0.15 M sodium hydroxide?
16. Which one of the following procedures would not be appropriate for the auditors when they...
16. Which one of the following procedures would not be appropriate for the auditors when they observe client's physical inventory-taking? A) Confirmation of goods in the hands of public warehouses. B) Supervising the taking of the annual physical inventory. C) Reviewing client’s inventory-taking plan. D) Taking random samples to perform test counts. 17. A client's physical count of inventories was lower than the inventory quantities shown in its perpetual records (accounting records under the perpetual inventory system). This situation could...
1) Which form of business organization would be most appropriate in each of the following cases....
1) Which form of business organization would be most appropriate in each of the following cases. Sole proprietorship, Partnership, Corporation, Co-operative, Government enterprise or Non-profit Organization. Explain your choice short and concisely. a) a three-person law firm b) a corner convenience store owned and operated by a single owner c) a savings and loan organization for school district employees only d) a chain of 12 restaurants with 60 owners e) an enterprise providing inexpensive public transport to the residents of...
For each of the following situations, select the most appropriate risk financing plan (retention, transfer, or...
For each of the following situations, select the most appropriate risk financing plan (retention, transfer, or hybrid) for the given organization based on the given loss exposure’s relative frequency and severity. Local Package Delivery experiences frequent physical damage losses to its trucks. National Farm Products wants to protect its poultry operation from the possible financial consequences of an avian flu outbreak. Construction Contractor recognizes that worker injuries are an unfortunate consequence of doing business.
For which of the following scenarios would it be appropriate to use a one-sample z-test? A....
For which of the following scenarios would it be appropriate to use a one-sample z-test? A. Comparing the average weight of newborns in Hospital A to the average weight of newborns in Hospital B B. Comparing the political affiliation of ASU students against the political affiliation of all college students C. Comparing the number of packs of cigarettes smoked per day by residents of urban areas with the number of cigarettes smoked per day by all persons in the USA...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT