How Managerial Accounting Can Help Managers

Assignment 2 Creating, Financing, and Marketing a Business Shamika guard Professor Roderick D. Thomas Introduction to Business December 2, 2012 Identify the pros and cons of the federation as a form of ownership. Partnership is one of most usual forms of profession. There argon many advantages to trade confederacy as healthful as a a few(prenominal) disadvantages. One advantage is that a confederacy is easy to establish. This fanny be established through verbal symmetry or through a contact. A nonher advantage is the ability to pussycat financial re man-made lakes.The more capital a company has the faster they argon able to grow their business. Partnerships lessen the burden on the individualist caterpillar track the business. Since more than one party is in charge responsibilities can be divided amongst each person. By dividing the task they can use their skills to the high hat advantage. The pass-through tax treatment is one of the most beneficial advantages of formin g a confederation. With the pass-through thither is no taxation to the business itself all income, deductions, and credits, pass through to the individual partners and are reported on their individual tax re good turns. mend the advantages of a partnership seem like the perfect way to start a business there are disadvantages. In a partnership you are non only responsible for the errors and misjudgments that you make but withal for your partners. some(prenominal) parties are equally responsible for the debt and obligations of the business. Like any other relationships, partnerships alike establish disagreements. Disagreements amongst partners can create bad turmoil and prevent the cooperation undeniable to keep the business focus. Disagreements can also lead to one of the partners deficiency to withdraw from the partnership.This can pose insecurity about how long a business will stay operational. Lastly, a partner that extracts from a partnership is still held accountable fo r any debts or obligations the company had at the measure of withdrawal. Discuss depoting options for midget businesses. The top task for any small business is trying to determine how to successfully fund their business. The most super C used source is personal resources. This not only your own bullion but often is asking friends and family members, and credit tease.When borrowing from friends and family it is important that you hear that it would be a financial risk they are taking by giving you the money and if your business doesnt succeed they energy not get the money bet on. While using credit cards might seem like a great option they are also a highly risky financing option. While credit cards provide fast and flexible money they can also cause a huge amount of debt. Interest rates and financing fees can add up fast if the money isnt paid back quickly to credit card companies.While many people have an premise that getting a add from a bank is a fair easy process the y are often discover they were incorrect. Commercial loans are harder to come by due to banks and other lenders being tentative to fund a company that doesnt have a reputation. Only 20% percent of small business owners launch with commercial loans due to a share of paper work required to fill out the loan and an extensive waiting period. If considering loans, a great source for small business would be the U. S.Small Business Administration also known as SBA. While the SBA doesnt provide free money to start-up businesses they do somewhat reassure loans from local commercial lenders. The SBA reduces the risk for the lender or bank, which makes the banks further unforced to grant loans to small business owners. Angel investors are another source of funding. Angels are wealthy people that invest in promising start-up companies in order to make money for themselves. Angels are considered one of the oldest capitals for a start-up.Very few companies receive capital from angels but for th e right small business the money from an angel can seal the gap between the money they have gotten from friends and family and the venture capital that a small business is trying to attract. When looking at to expand on a larger scale some companies turn to venture capital firms. Venture capital firms fund companies in veer for of ownership in the company. Only a small fraction of pertly business receives any venture capital money. Determine and discuss how managerial accounting can help managers with product costing, incremental analysis, and budgeting.