Theory refresher - sources of funding
Taught by Louise Setton · AI tutor support included
You’ll learn how to evaluate sources of funding for major strategic projects, including bank loans, internally generated funds and equity.
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In this lesson
- 0:00 Core Activity B Funding Decisions
- 1:16 Assessing Available Funding Resources
- 5:06 Gearing And Interest Cover
- 7:40 Dividend And Liquidity Implications
- 9:10 Current Ratio And Loan Covenants
- 11:16 How To Evaluate Funding Sources
- 18:02 Comparing Debt, Cash And Equity
- 21:29 Applying Funding Decisions To New Park
- 25:20 Worked Loan Covenant Analysis
About this lesson
The lesson explains how to assess cost, risk, flexibility, availability, control, liquidity and shareholder expectations, using measures such as gearing, interest cover and the dividend payout ratio. You’ll also learn how to apply funding theory to an exam scenario, including analysing loan security and covenants, forecasting repayment capacity, assessing opportunity cost and using sensitivity analysis. This supports Core activity B, implementing senior management decisions, and is particularly relevant to CIMA case study exam questions.
Duration: 28m
Transcript
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