UNIT 3: BUSINESS FINANCE

ASSIGNMENT 1

STUDENT NAME
STUDENT ID
COURSE NAME
DATE
Contents
Introduction...............................................................................................................................................2
Different type of business and their source of business..........................................................................2
1. Qatar Airways........................................................................................................................................2
Partnership stage:..................................................................................................................................3
Public Limited Company stage:...........................................................................................................4
Private Limited Company stage:..........................................................................................................4
Apple Inc....................................................................................................................................................5
Partnership stage.......................................................................................................................................6
Privately Company stage:......................................................................................................................7
Public Company stage:..........................................................................................................................7
Company 3: United Ways.........................................................................................................................8
Partnership stage...................................................................................................................................9
Private Limited Company stage:........................................................................................................10
3: Explanation of source and suitability of revenue at Apple Inc........................................................11
Market size and share:........................................................................................................................11
Source of Revenue:..............................................................................................................................12
Objectives and Utilization of Revenue:..............................................................................................13
Supplementary activities and the revenue.........................................................................................14
Strategic Importance:......................................................................................................................14
Apple's sustainability objectives.....................................................................................................15
Conclusion................................................................................................................................................15
References................................................................................................................................................15

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Introduction

Business finance is the look at and manage of an organization’s money to assist it attain its

desires and increase its value. It consists of many things, like making a price range, making

predictions, spending, and retaining tune of coins glide. Making positive that a business has the

cash it needs to run easily, grow, and meet its economic obligations is the principle purpose of

business finance. There are many parts to the job of company business (Doan, 2022). Planning

finances in this way makes it easier, which in turn helps businesses set and reach their long-term

goals. Businesses can pay their bills, seize chances, and weather economic storms if they know

how to handle their money well. The study of financial data can help with strategy decisions like

mergers and acquisitions, the release of new products, and market growth. Another important

area where business finance is used is risk management. Companies should do risk surveys and

make plans for how to deal with risks in order to protect themselves against unexpected financial

loses. An enterprise need enough financial resources to operate smoothly, expand in an

environmentally sustainable manner, and achieve its long-term objectives.

Different type of business and their source of business

In this part of the report, I'll talk about three different types of businesses, their sizes, and the

money they need at different stages of growth.

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1. Qatar Airways

The airport in Doha, Qatar, is where the airline's main hub is located. There are flights from the

company to more than 160 places on six continents, connecting customers to important towns all

over the world. Qatar Airways is a company that works in the airline industry. They offer

services for both people and goods. This is one of the newest fleets in the world. It has more than

200 planes, including different types made by Airbus and Boeing (Li, 2024).

The airline is known for its high-class service, state-of-the-art rooms, and commitment to new

ideas. It often wins important awards, like Syrex’s World's Best Airline title. There are different

types of flight classes on Qatar Airways, such as Economy, Business, and First Class. Each one

is designed to provide ease and style. The airline also runs Qatar Airways Freight, which is one

of the best air freight companies in the world. There has been a lot of growth at Qatar Airways

since it started. The company has a lot of valuable assets that show how important it is in the

world of flight. The airline's fast growth, smart relationships, and commitment to high standards

have made it a leader in the industry, which increases Qatar's impact around the world.

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Partnership stage:

Qatar Airways initially relied on internal and partnership finance. Qatari government financing

dominated its early years as a government-owned enterprise. The airline's launch, aircraft

acquisition, and facility construction relied on government support (Doan, 2022).

Internal sources of finance used:

Internal sources of financing are cash a firm earns from its activities and assets without loans or

investments. Qatar Airways, a state-owned company, received major government funding. This

grant helped pay initial operations and infrastructural costs. Although the details are seldom

disclosed, this kind of funding frequently amounts to hundreds of millions of dollars,

demonstrating the large amount of money required to start an airline. Revenues helped the airline

develop, buy aircraft, and improve services. In the aviation industry, where early profitability

may be low, investing is crucial to development (Pu, 2020).

Public Limited Company stage:

Qatar Airways saw increase, it assorted its assets of investment, namely through seeking foreign

assets. Despite now not being publicly indexed, Qatar Airways employs techniques similar to

those of public agencies to stable various sources of funding for its growth.

External sources of finance used:

Qatar Airways has taken out various worldwide bank loans for fleet development and

infrastructure. The airline has negotiated large aircraft acquisition deals with foreign banks,

usually receiving attractive borrowing rates due to its strong financial backing. These loans have

annual interest rates of 3% to 6%, depending on economic conditions and creditworthiness.

Qatar Airways issued bonds to raise funding for expansion. These bonds appeal to investors due

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to the airline's profitability and government assistance (Hai, 2023). Reputable companies like

Qatar Airways have 2% to 4% annual bond returns, making them low-risk investments. Aircraft

leasing is common in aviation. Qatar Airways leases fleets to improve cash flow. Leasing

agreements cost $300,000 to $1 million a month per aircraft, depending on the kind and lease

terms.

Private Limited Company stage:

Qatar Airways generates revenue without conducting an initial public offering, which is one way

it resembles a privately held company.

External source of finance used:

Qatar Airways acquires equity funding via government financial infusions without publicly

issuing shares. This finance is essential during economic booms and recessions. The government

is the only stakeholder, providing funds without a public offering. Due to aviation's capital

intensity, estimates frequently exceed billions of dollars. Qatar Airways has formed various joint

ventures and strategic partnerships to boost its finances and operations. Investing in other airlines

and forming partnerships diversifies revenue and reduces operational risk (Pu, 2020). These

investments might range from hundreds of millions to several billion dollars, depending on the

relationships. Sale-and-leaseback arrangements are common for aero planes. Qatar Airways sells

and leases aero planes. The airline may create immediate cash flow while preserving fleet

management with this technique. Such agreements normally cost more than regular leases due to

their convenience and rapid availability. The premium may result in monthly leasing fees of

$400,000 to $1.2 million per aircraft, depending on the kind and region.

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Apple Inc.

Apple Inc. is a major player in the technology and consumer goods businesses. Its main office is

in Cupertino, California, USA. Apple is a well-known computer company that is known for

making innovative hardware, software, and market items. It is now worth more than $2.916

trillion on the market (Apple, 2022). Apple is famous for its top-of-the-line goods, like the

iPhone, iMac computers, iPad tablets, Apple Watch smartwatches, Air Pods wireless

headphones, and iOS and macOS operating systems.

Partnership stage

Internal sources of Finance used:

In 1976, whilst Apple Computer Inc. Turned into first based, co-founders Wozniak and Jobs

used proprietor's capital, a form of collaborative financing, to expand a modern and outstanding

corporation. During the primary stages in their company, Jobs and Wozniak used their very own

price range and offered their private possessions via auctions. According to the biography web

page, Jobs and Wozniak financed their company endeavor via promoting Jobs' Volkswagen

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automobile and Wozniak's beloved medical calculator. The exact sum of money invested by way

of Jobs and Wozniak stays mysterious since it has not been publicized. At this initial level, Apple

had advantages by the usage of owner's coins as an inner financing approach (Baxter, 2023).

Primarily, it turned into a resolute expression of determination, combining private resources with

the progress of their technological ambitions. Furthermore, by way of keeping entire ownership,

Jobs and Wozniak were capable of hold making decisions on their innovative pastimes. One

drawback become that the preliminary investment changed into pretty small as a result of

constrained personal resources. The fundamental danger in owner's capital lay in the founders'

financial protection on the grounds that they had been no longer best jeopardizing their

organization objectives but additionally their financial balance.

Privately Company stage:

External sources of finance used

Recognizing the need for immediate financial support after the creation of the Apple I and Apple

II computers, Jobs secured a sum of $250,000 in 1977 from Michael Markhala. A prosperous

former employee of Intel Corporation, not only became Apple's primary shareholder but also

held significant sway as a member of Apple's board of directors. When Steve Jobs asked Michael

Markhala to step down from his position at Apple in 1997, along with the rest of the board,

Markhala left the company (Gleiss, 2021). Markkula acquired the largest ownership stake in

Apple and had considerable power over the board of directors as a result of this external finance,

which took the form of a stock investment. Apple managed to avoid incurring debt by issuing

shares to Markkula, so giving the firm the financial adaptability to pursue its marketing and

product development objectives. Regrettably, Apple lost control and authority over decision-

making when Markkula got deeply engaged with the firm. The addition of the new, important

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investor raised concerns due to the possibility of conflicts of interest arising between Wozniak

and Steve, the original inventors of the firm, and the shareholder.

Public Company stage:

External sources of finance used

The transition into a public limited company in 2013, Apple actively pursued various financing

methods to meet its long-term financial requirements. The company's sales of high-yield

debentures, which have maturities ranging from five to thirty years, amounted to a total of

seventeen billion US dollars. Apple's use of debentures in this move demonstrated its

dependence on this financial instrument for long-term financing. An advantage of this technique

was that it provided a significant amount of money at interest rates that were somewhat lower

than those of other commitments. However profitable the firm may be, the fixed interest

payments posed a limitation on Apple's cash flow. Potential hazards associated with this

situation include the potential impact of market fluctuations on the value of the debentures and

the company's ability to make interest payments (Ren, 2020). Apple most likely chose to issue

debentures as a means of financing its continuous research and development initiatives,

worldwide expansion, and the development of new products. Debentures are a significant,

dependable, and enduring source of cash. Apple customized its financing strategy to suit its

specific needs by choosing debentures with different maturity dates.

Company 3: United Ways

The United Way is a worldwide organisation whose goal is to improve people's lives and the

lives of their communities by getting people to care for each other. United Way has been

working in more than 40 countries and regions since its founding in 1887. Its mission is to solve

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important social problems through partnerships and the gathering of resources. Some of the

problems that the group tries to solve by working together with businesses, states, NGOs, and

people are unequal access to health care, education, and resources (Tuli, 2023). For United Way,

the most important thing is to use the power of funders and workers to make real, long-lasting

change. The United Way is made up of many local groups that work together to figure out what

the community's needs are, push for policies that help the most vulnerable people, and fund

projects that make sure everyone has access to good healthcare, education, and financial security.

United Way's plan is to give communities more power and let local opinions and goals guide its

programs. United Way's job is to make communities stronger and more independent so that

everyone can do well. We do this by building partnerships and making good use of our tools.

Partnership stage

Internal source of Finance used:

Throughout the partnership stage, United Way works with a wide variety of stakeholders,

including businesses, foundations, and individual donors, to achieve their goals. It is vital to

develop partnerships in order to combine resources and make use of expertise in order to fulfil

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the needs that have been set out by the community (Piraux, 2019). Businesses may get engaged

in a variety of ways, including via Corporate Social Responsibility (CSR) initiatives, employee

fundraising efforts, and matching contributions. Donations made by corporations may take the

form of annual predetermined sums or percentages of profits, for instance. One of the most

popular sources of financing for United Way comes from private foundations that have an

emphasis on social welfare, education, health, and community development. These funds are

absolutely necessary in order to achieve the goal of financing certain programs and initiatives.

The United Way receives a significant portion of its funding from the donations made by

individuals. For the purpose of providing financial assistance, bequests, monthly commitments,

and one-time donations are all appropriate forms of support. The corporation makes the decision

to collaborate with United Way and makes a commitment to contribute one percent of its annual

revenue. The annual contribution that would be received as a result of this agreement would

amount to $100,000 if the firm reported a revenue of $10 million.

Private Limited Company stage:

External source of finance used:

In the process of developing and contemplating the possibility of becoming a Private Limited

Company (PLC), United Way may need more finance from outside sources in order to expand its

operations or enhance its capacity to remain sustainable. When a company receives financial

support from outside investors, equity financing is the process of distributing ownership interests

in the company in exchange for the money. Through the use of this method, United Way is able

to raise a significant quantity of money without incurring any debt. Bonds issued to the general

public or borrowing money from financial organisations such as banks or other lending

institutions are examples of debt financing (Pu, 2020). United Way, it is possible for the

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organisation to acquire $100,000 in equity financing by issuing 1,000 shares to outside investors,

with each share having a value of $100. If it were to borrow $500,000 at a rate of 5%, the

amount of interest that would be collected would amount to $25,000 annually. In order to sustain

and expand its humanitarian activities, United Way deftly navigates through a number of stages

and sources of financing. United Way is able to have a significant impact on communities all

over the world while also maintaining its financial stability. This is made possible by the

organization's several financial strategies, which include forming partnerships, making the most

of its own resources, and even contemplating becoming a public limited company and obtaining

funding from outside sources.

3: Explanation of source and suitability of revenue at Apple Inc.

Apple Inc.'s headquarters in USA position it as a competitive competitor in the consumer

electronics and technology sectors. Apple's market capitalization surpasses $2.916 trillion,

establishing its dominance in the computer sector. The firm is well known for its cutting-edge

consumer items, software, and hardware. Apple's most recognizable products are the iPhone,

iMac computers, iPads, Apple Watch wristwatches, Air Pods wireless headphones, iOS, macOS,

and iOS itself. As of December 2023, Apple's assets amounted to $352.58 billion.

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Market size and share:

It is estimated that Apple Inc. has a significant portion of the worldwide market for technology.

Apple has firmly established itself as one of the most valuable firms in the world, according to

the most recent estimates, which show that the company has acquired an official market value

beyond $2 trillion (Apple, 2022). The company has a notable position in the personal computer

industry with its Mac range, a strong position in the tablet market with its iPad family of

products, and a leading position in the market for high-end smartphones with its iPhone series of

products. The majority of Apple's income and substantial market dominance are generated from

the company's extensive variety of services, which includes Apple Music, iCloud, and the App

Store.

Source of Revenue:

The Services sector at Apple constituted 15.8% of the employer's income, representing a

widespread share of its normal earnings. This category contains Apple's subscription services,

together with the App Store, Apple Music, Apple TV, and Apple Arcade. Apple's cash sales

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generated from these offerings make contributions to the enterprise's earnings move, highlighting

the developing importance of recurring sales fashions in Apple's broader financial strategy.

The sales of wearables and domestic Pods within the accessories phase, which account for 11.9%

of Apple's revenue, considerably affect Apple's coins flow (Mancini, 2023). The organization’s

wearables and add-ons, consisting of the Apple Watch and Air pods, make a contribution to its

cash revenues by way of presenting clients more alternatives to enhance their Apple experience.

This is evident from the income figures of 53 million Apple Watches and 82 million Air pods in

2022. Apple's common financial overall performance is prompted by using a diverse range of

product strains, all contributing to its earnings. Apple's sales for 2021 amounted to $365.82

billion, with iPhones accounting for a tremendous 57. 8% of the whole sales. The iPhone's

ongoing function as Apple's flagship product and principal source of profits is evidence of the

corporation's dominance inside the cellphone industry.

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Objectives and Utilization of Revenue:

The Services area at Apple contributed 15.Eight% of the company's sales, representing a

widespread chew of its overall profits. This class encompasses Apple's subscription services,

including the App Store, Apple Music, Apple TV, and Apple Arcade. Apple's cash sales

generated from those offerings make contributions to the profits circulation, highlighting the

developing significance of ordinary revenue models inside the organization's standard monetary

strategy.

The income of wearables and home Pods within the add-ons section, which account for 11.9% of

Apple's sales, extensively influence Apple's coins flow. The agency's wearables and accessories,

consisting of the Apple Watch and Air pods, create enormous coins profits by means of

providing clients greater alternatives to improve their Apple experience. This is evident from the

wonderful income figures of 53 million Apple Watches and 82 million Air pods in 2022 (Tuli,

2023). Apple and Goldman Sachs have collaborated to introduce the Apple Card, a credit score

card, to enhance sales. Customers have the option to use Apple goods to make purchases and

divide the fee. Apple's iPhone Upgrade Programme consists of credit income as an additional

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supply of revenue. Usually, customers are given the choice to switch to a new iPhone once they

have made bills for his or her present iPhone for one year. This plan allows them to spread out

the price of their buy over 24 months. Apple's revenue increases whilst customers choose for this

financing opportunity, which divides the cost of the iPhone into uniform monthly installments.

Supplementary activities and the revenue

Apple generates a sizeable percentage of its additional sales from the App Store, a web-primarily

based marketplace that gives consumers a wide variety of objects for purchase and consumption.

Apple charges a charge for its function in supporting the distribution and show of apps made by

way of 1/3 events. Apple fees a 30% price for paid programs and in-app purchases, while loose

apps aren't subject to this rate. Apple collects a 30% price in the first year and a 15% charge

inside the following years for subscription offerings presented through the App Store. The App

Store's gross income of about $64 billion exemplify the exceptional achievement of this revenue

version and underscore the importance of auxiliary activities in Apple's financial approach.

Strategic Importance:

On November 6, 2023, Apple Inc. Stated that it had allotted an extraordinary $29.Ninety two

billion US on studies and improvement, based on its sales for the financial 12 months of 2023.

This initiative showcases the enterprise's determination to analyze and development.

Apple's sustainability objectives

Apple has proven its commitment to environmental sustainability by way of intentionally

donating a percentage of its sales, which includes $4.7 billion in Green Bonds. These

investments have played an essential position in promoting the development of recycling and

occasional-carbon manufacturing technology. Apple has allocated a part of its revenues towards

packages to acquire carbon neutrality by means of 2030 (Baxter, 2023). Through the Green

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Bonds software, Apple has been capable of finance initiatives and ideas that are seeking to

decrease its ecological footprint, foster improvements in manufacturing strategies, and enhance

the mixing of recycled substances in product layout.

Conclusion

Apple made the smart choice to branch out into services and products as well as iPhones. This

has helped the company's finances and made it less dependent on iPhone sales. Apple's plan to

expand is in line with its main goal of building a strong environment that lets all of its products

work together easily and give customers more value. Apple is growing its services, gadgets, and

licensing business by building on its well-known name, keeping customers coming back, and

technical know-how. With this plan, Apple is becoming a star in both consumer technology and

internet services.

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mediating role of industrial structural upgrading and moderating role of digital infrastructure.

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Gleiss, A., Kohlhagen, M. and Pousttchi, K., 2021. An apple a day–how the platform economy

impacts value creation in the healthcare market. Electronic Markets, 31(4), pp.849-876.

Pu, X., Chan, F.T., Chong, A.Y.L. and Niu, B., 2020. The adoption of NFC-based mobile

payment services: an empirical analysis of Apple Pay in China. International Journal of Mobile

Communications, 18(3), pp.343-371.

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Ren, C., Ting, I.W.K., Lu, W.M. and Kweh, Q.L., 2022. Nonlinear effects of ESG on energy‐

adjusted firm efficiency: Evidence from the stakeholder engagement of apple incorporated.

Corporate Social Responsibility and Environmental Management, 29(5), pp.1231-1246.

Mancini, J., 2023. Yahoo Finance. Retrieved from Apple's Lesser-Known Co-Founder Owned ⅓

Of The Company But Missed Out On A Potential $900 Billion Fortune:

Tuli, M., Mohana, R. and Kaur, A., 2023, November. Analysis and Visualization of Tweets

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Piraux, N., De Wolf, M. and Lejeune, C., 2019. The competition challenges between the

European airlines and the Gulf airlines and the strategies to implement in order to better face this

competition.

Apple Inc., 2022. Retrieved from Apple’s $4.7B in Green Bonds support innovative green

technology: https://www.apple.com/newsroom/2022/03/apples-four-point-seven-billion-ingreen-

bonds-support-innovative-green-technology.

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pp.723-734.

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