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Financial resources

Always borrow money from pessimists, they donít expect to be paid back.
Anonymous


The financial resources are there to meet a number of different needs:

  • The day-to-day operation (working capital).

  • Repair, upgrading and replacement of assets (equipment, skills, intellectual property, etc.).

  • Building up reserves for expansion or unexpected situations.

  • Servicing creditors.

  • Owners' profits.

  • Taxes, fees and dues.

An indication of the state of the financial resources of an organization can be gleaned from its accounts, noticeably the balance sheet and profit & loss account (income & expenditure account for non-profit organizations). However, financial accounts are notoriously bad at giving a clear picture of the financial health of an organization.

Sources of finance: 
Financial resources cover not only those immediate resources that an organization has, such as cash and readily saleable investments, but also potentially what it could raise due to its reputation and the strength of its relationships with others. Raising medium sized amounts of money is often more difficult than raising very small or very large amounts. If the financial resources of the organization are to be increased and strengthened from external sources, then the organizations needs good relationships with other parties - the stock-market for a company, the Parent Teacher Organization for a school, or the general public for a charity. There are many sources of finance for small concerns, from venture capitalists who want a stake in the business, to charitable trusts which are prepared to help extremely risky or what others would regard as undeserving causes. >>>