Financial Appraisal: RTE Limited

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Financial Appraisal Regeneration Through Education Limited (RTE) is a charity organization that has charitable aims of providing adult education courses in a deprived area of Portshampton. In addition, it seeks to provide discounted room letting facilities for clubs in the same area. This charity organization, has recently received a regeneration grant that has enabled it to fund the construction of a purpose built complex of rooms and conference facilities on a site adjacent to its current location. This paper addresses some of the queries that RTE has raised concerning financial risks in transactions, comparison with filing requirements, and reporting research among other things. Query 1: Advance Payments to Suppliers This first query has four major issues and first of all there is a substantial amount of money or deposit that has to be paid on the furniture and fittings for the new building. Secondly the supplier, who is demanding this substantial deposit, is unknown to RTE and has no track record with them. Thirdly, this scenario creates the possibility of financial risks taking place. Lastly, if the transaction is made there will be cash flow implications of providing the large deposit on the charity’s fund reserves. The greatest among these issues is the possibility of financial risks and how they can be minimized. This portion seeks to explain how RTE can minimize the effects of financial risks due to this transaction. According to Horcher (2005, pp. 2-3), financial risks arise through countless transactions, which are of a financial nature. This is to mean that, whenever there is a financial transaction, there are high chances of occurrence of financial risks. These transactions include sales and purchases, loans and i... ... middle of paper ... ...ated companies legislation, Oxford UP, New York, NY. Dawes, AP 2009, Charity accounts: A practitioner’s guide to the charities sorp, 4th edn, Intl Specialized Book Service Inc, Portland, OR. Fabozzi, FJ 2009, Financial risk management, John Wiley & Sons, Hoboken, NJ. Heidenbauer, S 2011, Charity crossing borders: The fundamental freedoms’ influence on charity and donor taxation in Europe, Wolters Kluwer, Bedfordshire. Horcher, KA 2005, Essentials of financial risk management, John Wiley & Sons, Hoboken, NJ. Madura, J 2010, International financial management, 10th edn, South-Western Cengage Learning, Mason, OH. Palmer, P & Randall, A 2002, Financial management in the voluntary sector: New challenges, Routledge, New York, NY. Rezaee, Z 2001, Financial institutions, valuations, mergers, and acquisitions: The fair value approach, John Wiley & Sons, Hoboken, NJ.

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