Financing your business
Article Abstract:
Methods and sources of financing for those planning to start up a corporation are discussed under two categories: equity financing (the selling of interests in the firm to raise capital), and debt financing (the borrowing of funds). When using equity financing techniques, new business enterprises should realize that private placements of stock are limited to sales to 35 purchasers within a 12-month period, while public stock offerings usually cost 20 percent of the capital raised. In addition, venture capital firms reject an average of 90 percent of the proposals presented to them. Venture capital firms assess potential companies according to the: amount of capital requested (capital requests in the $250,000 to $2 million range are the most likely to be accepted); experience of the founders and managers involved; operating history of the new firm; and competitive advantage of the new firm. Banks are likely to loan funds to new businesses that: have realistic plans for the capital; have founders with good business reputations in the community; have developed repayment plans for the loan requested; and have requested a sufficient amount of capital to get started. In either situation, equity or debt financing, entrepreneurs should prepare thorough and professional business plans.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1987
User Contributions:
Comment about this article or add new information about this topic:
Accounting for inventory in a reorganization or liquidation
Article Abstract:
Corporate reorganization or liquidation requires the complete accounting of newly acquired inventory. Most acquiring corporations value newly acquired inventories based on the inventory method of the tranferor. However, if the acquiring corporation uses different inventory methods, Treasury Regulations under 1.381 (c) (5)-1 have to be consulted. For reorganizations that require multiple transfers, an acquiring company may become either a direct owner of the assets or have indirect control of part of the assests through its subsidiaries. It is important to consider the method used to determine the goods on hand at the end of the accounting period and the method used to value the goods on hand at the end of an accounting period when selecting the best inventory method. Aside from this, changes in inventory methods are also subject to the approval of the commissioner.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1993
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Organizing for innovation. Organizational DNA for strategic innovation. The impacts of IT on firm and industry structure: the personal computer industry
- Abstracts: The controller's role in controlling construction costs. Improving productivity in the controller's organization
- Abstracts: Political diagnosis: applications in organizational development. Culture traits, strength, and organizational performance: moving beyond "strong" culture
- Abstracts: The role of behavioral formality and informality in the enactment of bureaucratic versus organic organizations
- Abstracts: Management imperatives for the year 2000. Hybrid organizational arrangements: new form or transitional development?