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

Prepare the journal entries, Moore Corportation follows a policy of a 10% d...

Moore Corportation follows a policy of a 10% depreciation charge per year on all machinery and a 5% depreciation charge per year on buildings (the corportation uses the nearest ful

Determine the amount and character of the recognized gain, On May 2, 1986, ...

On May 2, 1986, Hannah acquired residential real estate for $450,000. Of the cost, $100,000 was allocated to the land and $350,000 to the building. On January 20, 2013, the buildin

Investment property, I want to do research on investment property which res...

I want to do research on investment property which research topics are appropriate

the extra amount to be paid , The purchase of a car needs a $23,410 loan t...

The purchase of a car needs a $23,410 loan to be repaid in monthly installments for 4years at 12% annual real interest rate. If annual inflation rate is 4%, find the extra amount t

Draw x-bar process control chart and calculate probability , Kevin Murtuag...

Kevin Murtuagh, manager of an national reservation service for a nationwide chain of luxury hotels, is concerned about productivity of his operation.  Analysis of recent historical

What amount did spear receive from the bond issurance?, On July 1, 2010, Sp...

On July 1, 2010, Spear Co. issued 1,000 of its 10%, $1,000 bonds at 99 plus accrued interest. The bonds are dated April 1, 2010 and mature on April 1, 2020. Interest is payable sem

HELP!, How do you know what goes on an income statement? P.S. This is a bas...

How do you know what goes on an income statement? P.S. This is a basic income statement.

Finacial management, There are two projects A and B. The initial capital ou...

There are two projects A and B. The initial capital outlay of A and B are Rs.1,35,000 and Rs.2,40,000 respectively. There will be no scrap value at the end of the life of both the

Determine about the accounting information, Determine about the accounting ...

Determine about the accounting information Numerous user groups have an interest in accounting information relating to a business. Majority of these are outside the business ho

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

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