?You have been appointed by C and C Hydraulics as a Financial Constant, please advice the company with the following:
C and C Hydraulics Ltd. was established in 1994 by husband and wife team, Ian and Lorraine Couch, in Keighley, West Yorkshire.
The family-run business, which started life in a bedroom, has grown into a leading supplier of hydraulic cylinders and systems both in the UK and export markets around the world.
Lorraine said: “We set up C and C Hydraulics Ltd. 19 years ago and dealt with the buying and selling of hydraulic equipment from Europe and distributing it around the UK.
“Six years ago we expanded into manufacturing and we have continued to grow year on year. In 2008 we were producing 200 cylinders per month ? but last month we supplied 2,500 which is why we moved
into bigger premises in 2012.
“We wanted to buy more equipment that helped us expand our work into new sectors.”
Task One Part A
a) Identify and describe at least six sources of finance that are available to C and C Hydraulics Ltd. (A.C 1.1)
b) Assess the implications of the chosen source of finance on the legal status; dilution of control; and tax effects of C and C Hydraulics Ltd. (A.C 1.2)
c) From the sources of Finance mentioned in 1.1, evaluate giving reasons the most appropriate source of finance for C and C Hydraulics Ltd. (A.C 1.3)
Task One Part B
a) Analyse the cost of using i) Debt or ii) Equity to finance the expansion and advise C and C Hydraulics Ltd. on the advantages of using either debt or equity to finance (A.C 2.1)
b) Explain the importance of Financial Planning to Ian and Lorraine Couch. (A.C 2.2)
c) Identify the different decision makers (stakeholders) for C and C Hydraulics Ltd. and
assess their different information needs. (A.C 2.3)
d) Explain the impact of finance such as long-term loan, equity shares, finance and operating leases on a business?s financial statements. (A.C 2.4)
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