Question: Above is the case study: Here is the requirement Provide an explanation on the different sources of funding the company can have and their advantages



Above is the case study: Here is the requirement
Provide an explanation on the different sources of funding the company can have and their advantages and disadvantages. You should make recommendations as to how the company can manage the same to help in the planned expansion program. 500 words
Assignment Detail: CASE STUDY - Bravo Limited provides a range of management consultancy services to different sectors of the market in the UK. The company has been operating for the past 20 years, and is a subsidiary of Ambrose Holding, based in Malaysia. Bravo Limited has been a profit-making firm as it has retained its previous clients in addition to capturing an increasing share of the market. However, in the past 2 years, profits and cash flows for the company have reduced due to uncertainties and volatility effects in the market, and the company has been getting support from the holding company in Malaysia in terms of financial support. The board of management recently met and have decided that they have to improve and take on some new projects in order to improve their profitability and cash flow. Consequently, the Finance Director of Bravo has recently engaged your firm to help them source finance for their expansion plans and to also advise them on the planned projects. New booking model The current booking model that Bravo has been selling to companies is now deemed to be outdated and the company is looking to invest in a new model. The details of the proposal are outlined below. The manager in charge of sales has just informed your company that they plan to open a Service Suite in the Midlands and it is hoped that this Suite will be opened for business on 1st July 2023. You have also been informed that to start with, the company will only offer two popular services SS1 and SS2. This will be done to test the market and see if the business will break-even in the same period. These two are the most popular services and will be offered at 290 for SS1 and 320 for SS2. The company has provided you with the following information regarding the costs and estimated sales for the period mentioned above. Bravo Limited plan to put in 10,000 as start-up capital and plan to offer up to 2,100 services (combined) of SS1 and SS2 during the same period. They are not sure which of the two services will produce the higher profit for the company. Total budgeted services for each month are as follows: July 700 services, August 700 services and September 700 services of which 280 services will be for SS2 and 420 for SS1 for each month. You will be required to assess the best combination of services sales for the period. To help with the setup of the suite, the company has just concluded a deal with one of the high street banks to get a loan of 60,000 on the 1st of July 2023. The interest on this loan will be 3.0% per month to be paid every month. The company will be required to make 12 equal payments to repay the loan starting end of July 2023. The assistant manager has also requested that you do provide them with some information on the importance of understanding the effects of current economic climate and how this could affect the new Services Suite offerings as this is all new to them and this is the first time they are doing a project like this. Financial information As mentioned above the company plans to offer a total of 2,100 services per month between 1st July and September 2023. The fixed costs per month for the period are as below: From their costs estimates the variable cost of the services are 180 for SS1 and 210 for SS2. The fixed costs are for the whole period, so they are not affected by the level of service. On the other hand, variable costs will increase with services output, and thus it is sales output multiplied with variable cost per product. Revenue from the sale of SS1 and SS2 will be based on 40% cash and 60% credit to be paid the following month. The variable costs are paid in the month they are incurred. Requirement
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
