Finance is important asset of a business that needs to be enhanced with the passage of time in order to compete against the competitors in the external market. Clariton company has been selected for the current project report which is based on making decisions related to the financial performance of this enterprise. This report is all about defining and assessing various sources of finance ranges from internal and external. Financial planning is defined properly in relation with the various categories. The cash budget has prepared to analyze the current position of an entity. The capital budgeting abs ratio analysis is uses to assess the financial performance of the business entity.
1.1 Sources of finance for unincorporated and incorporated business
Incorporated- This term is related with the legal identity as the firm registered in the law are recognized as the legal entity (Gupta and Rai, 2016). The business who will registered with the law of the country counted among registered entity which possess all rights and obligations.
Crowd funding- This is one of the important source of finance in which people are invited to take the equity shares of an entity. The external parties are attracted to invest their valuables in the existing firm by enjoying ownership in return
Debentures- The debenture holders who will support the corporation by providing the variety of debt for specific period. The Coupon rate will ensure the interest to be charged on the amount taken which is the obligation of an entity to payback the debenture-holders.
Unincorporated-These businesses are registered under the legal law who have same identity between their business and the owner.
Bank loan- The amount borrowed by the owner by approaching different financial institutions for getting small and higher amount of loan (Raikes and McBean, 2016). The small scale entity will take loan according to their current business requirements.
Owner's capital-The personal savings of the owner will be invested in uplifting their existing position in relation to the external market. The amount used by an individual will have full control over their money to be used in their busine