Uncertainty concerning the business, Financial Accounting

Assignment Help:

Uncertainty concerning the business

It has been recognised in a variety of studies that the problem of adequately financing SMEs is a problem of uncertainty. A defining feature of SMEs is the uncertainty surrounding their activities. But much owners or managers inform their banks of what they are doing there is always an element of uncertainty remaining that is not a feature of larger businesses. Larger businesses have grown from smaller businesses as well as have a track record - especially in terms of a long-term relationship with their bankers. Bankers can examine over a period of time that the business is well-run, that managers can manage its affairs and can therefore be trusted with handling bank loans in a proper way. New businesses, in general SMEs, obviously don't have this track record. The problem is still yet broader.

Larger businesses conduct more of their activities in public for example subject to more external scrutiny than do SMEs. Therefore if information is public, there is less uncertainty. For instance a larger business might be quoted on an exchange and therefore be subject to press scrutiny exchange rules regarding the provision of certain of its activities and has to publish accounts that have been audited. Many SMEs don't have to have audits certainly don't publish their accounts to a wide audience and the press are not really interested in them.


Related Discussions:- Uncertainty concerning the business

Profitability index of a project, Using the profitability index, which of t...

Using the profitability index, which of the following projects should be accepted? Project M:  NPV = $60,000     NINV =    $200,000 Project N:  NPV = $10,000     NINV =     $

Americans with disabilities act - ada, Americans With Disabilities Act - AD...

Americans With Disabilities Act - ADA  legislation passed in 1990 that bans discrimination against people who are having disabilities. According to this Act, discrimination against

What is the monthly rate - annual rate, Suppose that the annual rate of int...

Suppose that the annual rate of interest is 4%. (a) What is the monthly rate? (b) Consider a 3-year lease on a car that is worth $20,000 today. The first payment on the lease

Analyse the main sources of finance , Consider a multinational listed compa...

Consider a multinational listed company that has recently carried out an acquisition. You may also select a company that carried out an acquisition long ago as long as there is inf

Product costs and which are period costs, The costs that follow were extrac...

The costs that follow were extracted from the accounting records of various different manufacturers: 1.    Weekly wages of an equipment maintenance worker 2.    Marketing costs

Corporate accounting system, 1. This assignment is to be submitted as an in...

1. This assignment is to be submitted as an individual assignment.  2. Marks will be deducted for poor quality presentation. For guidance on the requirements for the presentatio

Deferred tax assets and deferred tax liability, Below are excerpts from Saf...

Below are excerpts from Safeway's 2010 Annual Report, including its Consolidated Balance Sheets, a portion of Note E, Lease Obligations, and Note H, Taxes on Income, from the Notes

Bond that matures in 12 years, You just purchased a bond that matures in 12...

You just purchased a bond that matures in 12 years. The bond has a face value of $1,000 and has an 7% yearly coupon. The bond has a present yield of 5.74%. What is the bond's yield

Major qualitative characteristics of accounting information, Four major qua...

Four major qualitative characteristics of accounting information There are four major qualitative characteristics which influence usefulness of accounting information. Additio

Rate of return on assets, EVERLIGHT COMPANY LIMITED Comparative Balan...

EVERLIGHT COMPANY LIMITED Comparative Balance Sheet December 31, Year 1 and Year 2     Year 1       Year2

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd