Finance for International Business Assignment Sample
Introduction
The report illustrated different aspects needed to picture the investment appraisal, cost of capital, and risk. For the purpose of making accurate evolution, the UK-based industry, named Brexylite plc, has been selected. A brand-new product of Brexylite plc is Pro-3 which required sustainable development and capturing the market. A durable report expects indispensable information for the appropriate structurization of investment appraisal. As a result, this report includes different essential financial components for uplifting the knowledge and understanding of this topic. The analysis of various financial parts clears out the present financial condition of Brexylite plc. Defending all the economic problems anticipated appropriate theory, which was also looked out in the content.
Company background
Brexylite plc recently launched a handheld gadget named Pro-3 for a better experience in video games. A precise market survey has been conducted to understand the market condition. The market survey cost around £300,000 in the previous year, for which it is essential to make a proper financial plan. It is important to include certain technologies that increase productivity and overcome cost. The machinery for manufacturing the product needs economic strength. In this case, Brexylite plc has already invested around £8 million. According to OWULO (2021), the company’s primary focus is to provide an appreciable experience to the customers with quality service. Proper consultation with the technical consultant helps to renovate the structure of the products. As a result, the customers are pretty satisfied with the service. Around £30,000 consultancy fees have been allocated so that proper technical implementation might be done smoothly in the upcoming time. Every aspect of financial investment eventually illustrates the possibilities of future growth and development of a company.
Analysis of the essential financial components
Strategies of the company to maintain company dignity
The company will provide precise strategic planning that helps maintain the dignity and values in all the components related to finance. When planning finance, the observation over strategic planning must not be terminated. Therefore, strategic planning and financial planning can demonstrate a perfect financial report. Listerborn et al. (2020) said that the industry needs to implement proper strategies to increase effectiveness when managing the budget, cost, and resources. From this perspective, the analysis mentioned that the components like cost, resource, budget, and align are agents of maintaining the value of a company.
The available choice for financing
An organization has two choices: equity financing and debt financing and a combination of debt and equity financing. The concept of debt financing refers to investors being the business’s ultimate. When a business requires more Finance, the investors can support the company with more investment. According to Alam et al. (2019), when the investors have invested the maximum investment in an organization and there is no scope for more financial support, the company starts to sell the debt instruments to the investors. This thing is called debt financing. Equity investment carried a different process to accomplish the loan at the time of achieving the loans instead of cash investment; when a company debits an individual stake to the investors is called equity investment. Among these financing options, Brexylite plc can choose one.
The operating and financial risk with mitigation
Finance has always carried a vital role in making a smooth business running and revenue consumer. For that reason, the concept of mitigating financial risk is to hire such strategies to terminate the possibilities of financial ruin. Valaskova et al. (2018) there are four steps to reduce the operating and financial risk from the organization process. The related categories are risk acceptance avoidance, risk limitation, and transference.
Research on the financial investigation from international perspectives
Every company has the primary motive to extend its business internationally. For that reason, it is essential to choose the strategies and mitigation process that is sufficient for international levels. According to Hale et al. (2020), when an industry tries to match the global culture and business procedure like Europe, it is essential to know about all the related concepts regarding this product. For example, in the case of Brexylite plc, the company is producing the handheld video games for which in Europe, the exact market of this product needs to be understood.
This financial component helps understand the needed sections for the company Brexylite plc. The financial report of this company should be done in a precise manner so that it must cover all the components with excellent efficiency.
Analysis of the present financial condition of Brexylite plc.
Recently, the directors of Brexylit plc investigated identifying the business expansion possibilities and the production facility to make an independent distribution system in the industry. The retailers would be Europe, Great Britain, and the USA for this separate distribution system. Recently the sector has been evaluating the possibilities of purchasing a machine to make a new gadget named Pro-3 with a four-year warranty. The marketing department accomplished a survey costing £300,000 to stand the market’s current situation. Also, the machinery execution process costs £8million. In the last year, the industry spent £30,000 on consultancy fees. It has been observed from the information that the Pro-3 product contributes £10 per unit in the unit variable and the unit sales. This contribution forward unit cell at variable can be expected to increase by 5% per annum. According to Min et al. (2019), in recent times, the involvement of such kinds of graduates has increased, and the distribution of the product is expected to be raised in the future. The directors have fixed that the increased production will be divided into Europe and USA’s own for selling purposes. So, for a barrier-free selling procedure, the industry will keep a cash flow dominated in the USA ($) and Europe (€) so that the exchange rate can be. In the project’s first year, the professional fees incurred £50,000, not subject to inflation. This assumption is that the fixed cost will be £100,000 per annum because Brexylit plc cannot sphere capacity in space. The new project of launching Pro-3 needs an investment of £1.5m in T0. Anner (2020) stated that as this industry came to export this product in Europe, the USA zone is required to store the product for the selling purpose.
The current finance of Brexylite plc indicated 3 different aspects to illustrate the situation: ordinary share capital, preference share capital, and debt capital. Brexylite plc has only 20 common shares, £2 million of preference share capital. The board of directors’ strategy for increasing the finance was by approaching the investors or increasing the amount of borrowing with the share. This strategy has proven stability and transparency because the company will become more powerful financially than its competitors.
Theory of finance
Modern Portfolio Theory
Figure 1: Modern Portfolio Theory
(Source: Runting et al. 2018)
Brexylite plc is an aspiring video game industry in the UK that intends to extend its business in other countries like Europe. For that reason, a modern portfolio of the product Pro-3 is a vital component. According to Runting et al. (2018), the portfolio helps to analyze the foreign market so accurately that the decision to launch this product is not an inconvenience in the decision for the company. The Modern Portfolio Theory is directly anxious about the proper investment. The case study informed that the issue amount has already been invested in different segments to investigate the market condition. Market condition analysis is essential, but the result should be optimistic. Otherwise, this report must ruin the company’s finance in a short time. The advantages of modern portfolio theory are:
- The theory is usually concerned with minimizing risk after implementing the finance strategy. As a result, the company remains Fearless when going with this theory.
- Proper selection of investors and financial supporters is essential to maximize the prophet and minimize the risk factors. The theory approaches the investors in a modern actor that reveals each component with a crystal-clear vision.
- A clear vision of the returns from financial investment is also a significant part of modern portfolio theory. As the invention has been analyzed from the initial part of the implementation, the company is clear about the future possibilities.
- Another prestigious aspect of modern portfolio theory is that the investment enhances the asset. Therefore, the returns achieved with the proper financial investment will be equally distributed in all the company departments.
- The investors are pretty assured about the investment. There is no need to illustrate the market possibilities if the theory has been generated in an organization.
The above advantages are sufficient to build up a company’s interest in implementation. At the condition the Brexylite plc belongs, the Modern Portfolio Theory is appropriate. This report must examine the requirement of building up critical thinking regarding the performance of an organization and another perspective. It takes two to make a noise in the competitive market. According to Dougherty and Natow (2020), finance will be more substantial when a company is well aware of the implemented theory’s consequences. The combat quality has grown up with more strength. Modern portfolio theory has a perspective depending on which argument has been established.
- A company invests in different departments to collect substantial revenue circulated for industrial development and sustainability. The profile created with modern portfolio theory can add on relatively superior financial payment than the departmental revenue.
- The other is the diversification of the assets. The portfolio collects a certain amount of revenue, among which assets are not counted.
All the mentioned perspectives of the consequences of implementing the modern portfolio theory indicated that the company would achieve optimal results.
Recommendations
The company can use alternative sources for finance because it helps diversify the risk factors present when collecting investors.
- There is an indication of two different financing systems: equity financing and debt financing. Although according to Clauss et al. (2022), the industry can use a combined procedure of these two financial options, the advantage of using a combined version is to increase the flexibility to overcome the crisis. However, when a company strictly follows a particular procedure, it becomes tough to go out of the line. As a result, the limitations hamper the organization’s financing structure. For that reason, it is recommended to choose a middle process and increase flexibility as much as possible for the industry Brexylite plc.
- Other sources benefit from collecting proper economical support for a rising industry. Borrowed loans from commercial banks, trade credit, indigenous bankers, and installment credit are the modern sources from which industry can quickly achieve financial support. As the target areas are Europe, Great Britain, and the USA, which has an excellent market for this industry, the financial borrowing does not encounter any problems.
- Every financial implementation follows 5 general steps, among which Brexylite plc already occupies the third step where the company has selected the financial strategy. For that reason, the system should be in action in the upcoming time so that the consequences of this activity are analyzed. In the company’s first step, the present market conditions determine whether financial survival is possible or not. Then, immediately after the auction, the organization started to set individual goals that illustrate the potential of the company’s strategy (Estrada-Jiménez et al. 2019). Till this step, the organization has done. All the measures identified in the concluding part of this strategy are the result. Where the evolution and identification of the quality of the strategic plant have been done, it is recommended that Brexylite plc adhere to this structure in the upcoming period.
Conclusion
The report’s overview indicated that the finance of Brexylite plc must be accurate for launching the brand-new product Pro-Therefore, enhancing the word, different aspects like analysis of the essential financial components, Modern Portfolio Theory, Analysis of the present economic condition of Brexylite plc, and recommendations have been included. In the general overview, different aspects of financial planning have been included to increase the understanding of the assessment. However, the motive of this assessment is to understand the actual components of financial planning that are sufficient to enhance knowledge of investment appraisal. After that, the theoretical aspect of Finance helps to understand the everyday limitations and advantages that finance might encounter. The concluding part of this report is enhanced with some recommendations sufficient to uplift the understanding to one more grade. This is the procedure of making the financial report.
Reference list
Estrada-Jiménez, J., Parra-Arnau, J., Rodríguez-Hoyos, A. and Forné, J., 2019. On the regulation of personal data distribution in online advertising platforms. Engineering Applications of Artificial Intelligence, 82, pp.13-29.
OWULO, J.O., 2021. EFFECT OF TELECOMMUNICATION SERVICES ON CUSTOMER SATISFACTION IN ABUJA METROPOLIS. INTERNATIONAL JOURNAL OF BUSINESS AND MANAGEMENT RESEARCH, 2(1), pp.152-176.
Listerborn, C., Molina, I. and Richard, Å., 2020. Claiming the right to dignity: New organizations for housing justice in neoliberal Sweden. Radical housing journal, 2(1), pp.119-137.
Alam, A., Uddin, M. and Yazdifar, H., 2019. Financing behaviour of R&D investment in the emerging markets: The role of alliance and financial system. R&D Management, 49(1), pp.21-32.
Valaskova, K., Kliestik, T., Svabova, L. and Adamko, P., 2018. Financial risk measurement and prediction modelling for sustainable development of business entities using regression analysis. Sustainability, 10(7), p.2144.
Hale, R.C., Seeley, M.E., La Guardia, M.J., Mai, L. and Zeng, E.Y., 2020. A global perspective on microplastics. Journal of Geophysical Research: Oceans, 125(1), p.e2018JC014719.
Min, S., Zacharia, Z.G. and Smith, C.D., 2019. Defining supply chain management: in the past, present, and future. Journal of Business Logistics, 40(1), pp.44-55.
Anner, M., 2020. Squeezing workers’ rights in global supply chains: Purchasing practices in the Bangladesh garment export sector in comparative perspective. Review of international political economy, 27(2), pp.320-347.
Runting, R.K., Beyer, H.L., Dujardin, Y., Lovelock, C.E., Bryan, B.A. and Rhodes, J.R., 2018. Reducing risk in reserve selection using Modern Portfolio Theory: Coastal planning under sea‐level rise. Journal of Applied Ecology, 55(5), pp.2193-2203.
Dougherty, K.J. and Natow, R.S., 2020. Performance-based funding for higher education: how well does neoliberal theory capture neoliberal practice?. Higher Education, 80(3), pp.457-478.
Clauss, T., Breier, M., Kraus, S., Durst, S. and Mahto, R.V., 2022. Temporary business model innovation–SMEs’ innovation response to the Covid‐19 crisis. R&D Management, 52(2), pp.294-312.
………………………………………………………………………………………………………………………..
Know more about UniqueSubmission’s other writing services:
