Analyse the finance costs, Financial Econometrics

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The Citilink Bus Company ("Citilink") was established in 2000 to operate a bus service across a city with 1 million inhabitants. The bus company was created by an indigenous businessman and operated as a sole trader. In 2007, however, it experienced financial difficulties and a large international transport business was admitted as partner of the company. The company became a limited company in 2009, aiming at floating at the stock exchange in near future.

The financial difficulties in 2000 make Citilink understand the importance of financial management. In view of the global financial fragility, Citilink's board of directors would like to take a review on the financial status of the company. As an independent business consultant, you have to write a FORMAL BUSINESS REPORT to the Board to address the following issues:

(a) Identify the sources of short/medium and long term finances available to Citilink now and in near future. You may refer to Appendix I to support your findings, if needed.

(b) Assess the legal, financial, control, and bankruptcy implications of the different sources.

(c) Analyse the finance costs of the respective sources of finance.


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