Table of Contents Introduction of Walton Sources of Finance Internal Sources of Finance External Sources of Finance Financial Sources of Walton Internal Sources of Walton External Sources of Walton References
Walton Hi Tech Industries Limited started operating in Bangladesh from 1977. Today it is considered as one of the top manufacturing plant in Asia. It is the manufacturer of multi-staged electronics. Refrigerator, air conditioner, freezer, motorcycle, television, mobile phones, washing machine, microwave oven and several other electrical home appliances are their main product. Walton Hi Tech Industries Limited and their sister concerns have 12,000 employees and around 600 skilled engineers from abroad working for them. They also have a strong Research and Development division that comes up with new and innovative products. Walton also has their own Mould and Die making section and machineries from abroad. Walton maintains a strong Quality Control policy and has a Quality Control Division. Walton has several showrooms and outlets located all over the country. Walton has managed to capture a significant market share over the years because of their innovative and affordable products.
Sources of finance mean different ways a business can attain money. The financial need of any business depends on the size and type of the business. Businesses can access financial resources from two main sources:
Owner’s Savings This money comes from the owners own savings. This can be in the form of start-up capital which is used when the business is starting up. It can also be in the form of additional capital which can be used for the expansion of the company. Advantages:
Disadvantages:
Capital from profits A running business can use the profit made back in the business. This way more profit can be made in the future. The amount of profit that will be invested back in the business will depend on how much profit the owners want to keep for themselves. Advantages:
Disadvantages:
Sale of fixed asset Many businesses have fixed assets that are of no use to them. Money can be made by selling off those fixed assets Advantages:
Disadvantages:
Working capital This is the money that is used to pay for the daily activities of a business. Daily activities include paying bills, rents, salaries, stationeries etc. This is the temporary source of finance that a business keeps. Working Capital is defined as: Working capital = current assets – current liabilities Advantages:
Disadvantages:
Bank Loan Banks offer different types of loan, commercial mortgages and business accounts based on a particular business. Interest has to be paid to the bank by the business. To get these loans the business will also have to show the bank some kind of security. Advantages:
Disadvantages:
Hire Purchase This method allows a business to use resources and obtain assets without paying a big sum of money. Regular payments have to be made in order to do such thing. After all the payments have been made the asset belongs to the business. Advantages:
Disadvantages:
Leasing This method allows businesses to use resources and assets by paying to use them whenever they need it. The businesses do not end up owning the goods at the end of any lease. Leasing is seen as renting an asset. Advantages:
Disadvantages:
Share Issues Issuing shares is offering an ownership of the business. Most small companies issues shares when they become limited (ltd) from sole trader or partnership. These shares are not offered to be sold publicly but it is available close friends and family. When limited companies become public limited company (PLC) they can sell shares on the stock exchange. These shares can be sold many times at different price depending on the demand. Advantages:
Disadvantages:
Building Societies Building societies offer loans, business accounts, mortgages and overdraft facilities with interest. Unlike taking a loan from a bank businesses will not have to show some security to get the loan. Advantages:
Disadvantages:
Venture Capitalist These people invest in risky ventures to get a share of the ownership. They have experience building companies and know their job very well. They provide capital for the business to expand and grow. Advantages:
Disadvantages:
Factoring Factoring is when another firm buys businesses debts. This way the business gets immediate money and the debt factoring company collects the debts and gets a cut for their service. Advantages:
Disadvantages:
Friends or family Money can be borrowed from friends or family. This can be paid back in exchange of limited shares or in cash. This money can be obtained at a lower interest rate. Advantages:
Disadvantages:
Government grants This is a debt free financing offered by the government to new or established businesses. This gives businesses instant stability to expand their business. Advantages:
Disadvantages:
Walton Hi- Tech Industries Limited use both internal and external sources of finance. They are explained below.
Capital from profits Walton uses the profit made back in the business. This way more profit can be made in the future. The amount of profit that will be invested back in the business will depend on how much profit the owners of Walton want to keep for themselves. Advantages:
Disadvantages:
Sale of fixed asset Walton is a big industry with extra assets that sometimes take up space rather than coming to use. These fixed assets are of no use to them. Walton is able to make extra money by selling off those fixed assets to businesses that need them. Advantages:
Disadvantages:
Working capital This is the money that is used to pay for the daily activities of Walton. Daily activities include paying bills, rents, salaries, stationeries etc. This is the temporary source of finance that Walton keeps. Working Capital is defined as: Working capital = current assets – current liabilities Advantages:
Disadvantages:
Bank Loan Banks offer different types of loan, commercial mortgages and business accounts based on Walton’s business. Interest has to be paid to the bank by the business. To get these loans Walton will also have to show the bank some kind of security. Advantages:
Disadvantages:
Hire Purchase This method allows Walton to use resources and obtain assets without paying a big sum of money. Regular payments have to be made in order to do such thing. After all the payments have been made the asset belongs to Walton. These assets can be machineries needed to build products and cars to transport them to the outlets. Advantages:
Disadvantages:
Leasing This method allows Walton to use resources and assets by paying to use them whenever they need it. The businesses do not end up owning the goods at the end of any lease. Leasing is seen as renting an asset. Advantages:
Disadvantages:
Share Issues Issuing shares is offering an ownership of the business. Walton sells shares on the stock exchange. These shares can be sold many times at different price depending on the demand. Advantages:
Disadvantages:
Factoring Factoring is when another firm buys businesses’ debts. This way Walton gets immediate money and the debt factoring company collects the debts and gets a cut for their service. Advantages:
Disadvantages:
Government grants This is a debt free financing offered by the government to new or established businesses. This gives Walton instant stability to expand their business. Advantages:
Disadvantages:
Biz / ed. 2012. Biz/ed – Introduction – Sources of Finance | Biz/ed. [ONLINE] Available at: https://www.bized.co.uk/learn/accounting/financial/sources/index.htm. [Accessed 26 February 14] Facebook . 2011. Waltonbd. [ONLINE] Available at: https://www.facebook.com/Waltonbd. [Accessed 25 February 14]. Iowa State University. 2013. Types and Sources of Finance for Start-up Business | Ag Decision Maker. [ONLINE] Available at: https://www.extension.iastate.edu/agdm/wholefarm/html/c5-92.html. [Accessed 25 February 14] Walton. 2014. Walton at a Glance. [ONLINE] Available at: https://www.waltonbd.com/index.php?route=information/information&information_id=4. [Accessed 25 February 14] wikinut. 2009. Business: Source of Finance. [ONLINE] Available at: https://business.wikinut.com/Business%3A-Sources-of-Finance/jryqhksz/#Internal-Sources-of-finance. [Accessed 26 February 14]
A Financial Audit on Walton Hi – Tech Industries Limited. (2017, Jun 26).
Retrieved January 30, 2023 , from
https://studydriver.com/a-financial-audit-on-walton-hi-tech-industries-limited/
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