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

What was lavina''s accrual-basis net income (loss) for year, During 2011, L...

During 2011, Lavina Corporation had cash and credit sales of $94,000 and $91,000, respectively. The company also collected accounts receivable of $53,400 and incurred expenses of $

Net present value evaluation of proposed investment, Q. Net present value e...

Q. Net present value evaluation of proposed investment? WORKINGS Fixed costs = 4·50 × 100000 = $450000 per year Annual writing down allowance = 3000000/10 = $300000

Which transaction results in an increase in revenues, Which of the followin...

Which of the following transaction results in an increase in revenues? a. receipt of accounts receivable b. purchase of inventory c. receipt of principal from bank loan d. delivery

Rules of intestacy-leaves several wives, Rules of intestacy:leaves several ...

Rules of intestacy:leaves several wives The intestate leaves several wives, married under any system of law which permits polygamy. His personal and household effects and the r

What is the break-even point in sales and units, The Soft-Flow Ink Company'...

The Soft-Flow Ink Company's income statement for the preceding year is presented below. Except as noted, the costs revenue relationship for the coming year is expected to follow t

Interest-probable debts, Interest Interest may be claimed-up to the dat...

Interest Interest may be claimed-up to the date of the receiving order - if it is payable: By agreement; By statute; If the debt was created in writing and due at a

Fund accounting, Fund Accounting - Method of ACCOUNTING and presentation wh...

Fund Accounting - Method of ACCOUNTING and presentation whereby LIABILITIES and ASSETS are grouped according to the purpose for that they are to be used. Normally used by governmen

Income account-trusts laws and accounts, INCOME ACCOUNT (a) Classific...

INCOME ACCOUNT (a) Classification : Income will be classified under appropriate headings: Rents; Interest on Government securities; Dividends; Interest on

Discuss the pros and cons of financing in unhedged, You have the following ...

You have the following information about rates in London for Eurocurrency loans of one-year duration, the exchange rate between the USD and euros, the currency in which you want fi

Find out the constant nominal interest rate, You decide to invest 1000 in a...

You decide to invest 1000 in a 5-year Treasury Inflation protected bond that each year offers a return of -1.5% plus the rate of inflation. You assume 1-year inflation rates over t

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