Sourse Of Long-Term

Table of Contents
I. Introduction3
II. Equity (sh ars)3
1. Ordinary shares3
2. Preference shares5
III. Debt pay6
1. Debenture6
2. Bank loan:7
IV. Other source7
1. pick out back7
2. Retained Earning8
V. Conclusion9
References11
Bibliography12
Appendix13
1. Figure 113
2. Figure 313
3. Figure 4:14
4. Balance tab of Compass PLC 2009:15

I. Introduction
Capital is the fund, which available for companies, organizations to run day-to-day business. Therefore, the handiness of fund plays a key role to business operations. That military issues in many approaches of firms to the sources of fund, both from long-term or short finance. permit take 2009 annual report of Compass PLC is an example; it shows that, the lucre profit margin ratio is quite utter at 6.52%. While, a low profit margin indicates a low margin of safety: higher risk that a dec in sales will erase profits and result in a net loss, it means Compass may need to some borrowing to less their risk.
In general, short-term finance is cheaper than long-term one and the reason for needs mingled with them is different.



While short-term capital is for shorter time, long-term sources finance are for those who need over long period of time, in piece to expand business, to develop new products, project or maybe to buy another company. Long-term capital often involves a huge amount of money and might be from sort sources. It could be in form of debts such as:
-Equity (shares)
-Debt (Loans)
-Other sources
In general there are both advantages and disadvantages from each source, and their suitability for different enterprises should be considered and applied efficiently.
II. Equity (shares)
One of the roughly popular approaches to raise long-term fund is issuing shares. However, companies may need high return on equity in order to raising their capital. For example, Compass PLC has ROCE and ROE ratio at 13% and 12% , which means their return for shareholders is quite...If you want to pull out a full essay, order it on our website: Orderessay



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