Proposal: Management of financial Resources and decisions at Thoroughgood



This research was done in the form of an original-research paper for the researcher’s Managing Financial Resources and Decisions Course work at Colbourne College. It was relevant to conduct a research on this topic, Managing Financial Resources and Decisions, because it forms a part of the researcher’s final grade and is an essential topic to be familiar with in order to fully grasp the concepts of various Financial Funding for businesses and the implication of attaining theses financing on budgeting, decisions and cash flow especially when owning and conducting start-up business transactions. The researcher became aware of different funding options, the importance of proper financial planning, the impact of finances on the financial statement and how to evaluate how effective is the financial performance on business and its operations though the articulation of information gathered from the Colbourne College School Library along with secondary online sources. The content found was new to the researcher and was supported by a variation of authors as the subject area was adequately written on.

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This research can be used as a module to small business owners to effectively analyze their approach to financial matters that may arise in their daily operations in order to capitalize upon their strengths to maximize profits an investments, minimizing loss and debts and implement the appropriate changes where necessary in order to ensure financial sustainability within the business world. Prospective student and entrepreneur who aspire to complete this course or venture into the business world can benefit from the information gathered, since most of the content examines a detailed scope of Business Financing and Financial decision making within the Jamaican society which gives a realistic and in-depth analysis of the researched topic.

Literature Review

According to Faboozi & Drake (2009) Finance is the application of economic principle towards decision-making which involve the allocation of money under conditions of uncertainty.

However, Financial Management is defined by Andrews & Gallagher (2007) “as the process of managing the finances of a business by analyzing and evaluating investments options, assessing risks and determining the source and allocation of fund within a business”.

A business may choose to access financing from internal and external sources. Internal sources includes personal source, Retained Earnings and Share Capital -which refers to investment made by the owner in sharesand has an advantage because returns on investment are paid throughdividends(payments out of profits) (Riley 2012). External sources includes bank loans, bank overdrafts, investments, hire purchase, grant, selling shares or any other source of finance that comes from outside the company. These sources allows the company to finance projects that they cannot fund internally and purchase equipments which may promote growth within the business but cant alter ownership of the business and attract additional interest rates from banks and investors (Root III 2014).

Lending Institution brings lenders and borrows together and offer loans whether short-term - up to one year; medium-term - between one and three years; or long-term loans - over three years, by evaluating of the borrower’s creditworthiness and legal capacity, credit history and assessing the specifics of the project to be financed. Having accounts and a positive credit record with intermediaries is an advantage. The security used as collateral should be sufficient to cover the loan principal with interest attributable to lender and or intermediary (VTB 2014)

The JCSD is a facility for holding securities which enables share transactions to be processed by book entry. A book entry system is an accounting system which facilitates the change of ownership of securities electronically between parties (Forrest 2014)

Therefore it is essential that proper Management, control and planning of finances are practiced within a business. Financial planning is the act of controlling and analysing the resources available to implement the business’s action plan and the availability of the requisite finances to do so to ensure that long term cash flows are not negatively affected and leads to bankruptcy. The generated revenue from the business should not exceed the expenditure and depends on how well a business coordinated activities and budget its finances (Greenwood 2002).

One of the most fundamental facts about business is that the operating performance shapes the financial structure of the business. The financial situation of the firm can also determine its operating performance. The financial statements are therefore important diagnostic tools for the informed manager. The three main tools that are used to provide information of finances is the Balance Sheet, the Statement of Cash Flow and Income Statement. These statements show Returns on Equity (ROE), Profit Margins, Control Ratios and Financial Leverage, Coverage and Liquidity Ratios and determines whether a business is being profitable or it is incurring loss (Zender 2012).

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The views expressed within the literature review from the cited secondary sources had a profound impact on the research as it created a framework, facilitating definitions and supported notions on the researched topic, Small Business Enterprise, which was an advantage in giving a better understanding approach throughout the research.


The objectives of this research are:

  • Indentify the various of sources of Financing available for Thoroughgood to appropriately fund business operations and the implications of the indentified sources on the business
  • Explain the importance of financial planning and the impact it has on the financial statements pertaining to the cost of different source of finance Thoroughgood business activities
  • Analyse the process of budgeting and calculation of cost and pricing based on financial information to make sound financial decision at Thoroughgood.
  • Discuss the main financial statements and interpret them based on comparison and ratios within the internal and external business environment at Thoroughgood


The approach to this research was through a qualitative method. Qualitative research refers to the process of exploring ideas, answering questions, and understanding concept related to a particular subject area. (Silverman 2001)

The information that is presented in this research was collected from a diversity of secondary sources. Secondary sources refers to data and information that has already been composed and archived in various forms such as journals, books, websites and reports (Stewarts & Michael 1993)

The researcher opted to use a qualitative research method due to the structure and requirement criteria of the assignment given. The secondary sources such as the Financial Management Principles and Practice and others, provided the avenue for effective probation and interpretation of the researched topics due to the volume of information that was available on the subjected area. The research topic was not adequately written on locally in Jamaica but the international forums provided credible online websites such as and journal sources which contributed valuable information to the research. This fueled the research with expert analysis, current surveys and substantial opinions that added depth and dimension to the specified explored concept of the researcher’s assignment.


Andrews & Gallagher, JD & TJ, 2007.Financial Management: Principles and Practice. 4th ed. Minnesota: Freeload Press.

Faboozi &Peterson-Drake, FJ & P, 2009.Finance: Capital Markets, Financial Management and Investment Management. 1st ed. New Jersey: John Wiley & Sons.

Forrest, T 2014, Jamaica Stock Market, lecture notes distributed in Managing Financial Resources and Decision at Colbourne College, Kingston on 18 February, 2014.

Greenwood, RP, 2002.Hand Book of Financial Planning and Control. 3rd ed. Burlington: Gower Publishing Company.

Jaime F. Zender. 2012.Evaluating Financial Performance. [ONLINE] Available at: [Accessed 09 March 14].

Jim Riley. 2012.Sources of finance for startups and SMEs. [ONLINE] Available at: [Accessed 16 March 14].

Keown, AJ, Martin, JD, Perry, JW, Scott, DF, 2011.Financial Management: Principles and Application. 10th ed. Cambridge: Pearson Education Press.

Silverman, D, 2011.Interpreting Qualitative Data. 4th ed. London: SAGE Publication Ltd.

Stewart, D.W, Karmins, M.A 1993.Secondary Research: Information Sources and Methods. 2nd ed. Newbury Park, California: Sage Publication.

Root III, GN, 2014.The Advantages & Disadvantages of External Financing. [ONLINE] Available at: [Accessed 16 March 14].

VTB: A World without Barriers. 2014.Short-, medium- and long-term loans. [ONLINE] Available at: [Accessed 16 March 14].