The purpose of this report is to help prepare a plan to improve Hi-Lo Ltd financial position. This report will include an analysis on:
1. The stakeholders
2. The importance of financial planning
3. Sources of finance
4. An appraisal on potential investment projects
This will be followed by a conclusion which will include recommendations to the board.
Mullins defines stakeholders as an individual or group that has an interested in and/or are affected by the firms operations, goals, or activities.
Internal stakeholders are people who are already committed to serving the firm. External stakeholders are people who are impacted by the firm. Some stakeholders can be considered not only internal or external, but as connected. The diagram below show who are the internal external and connected stakeholders are within the firm.
All stakeholders are not equal and are entitled to different considerations. For example, a firm’s customers are entitled to fair trading practices but they are not entitled to the same considerations as the firm’s employees.
Each stakeholder has a different agenda within its firm and this can lead to a variety of conflicts of interest which could include, to where monies are spent and to which direction a firm takes. Conflicts can arise because shareholders want short term profits, the internal stakeholders’ desires tend to cost money and reduce profits. The owners often have to balance their wishes against those of other stakeholders or risk losing the ability to generate profits in the future, for example customers refuse to buy the firms products or employees may go on strike.
Description of each shareholder:...