Information Management Systems for Maxima Investment Company. Essay Sample.

Date:  2021-04-08 22:43:42
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The information management system (IMS) at Maxima will be used for: [1] Record keeping. Keeping records of transactions is important because it is a legal as well as an operational requirement. IMSs ensure that information is properly organized in a way that optimizes retrieval. Records kept will include client data, cash reserves, and operational expenses among others [2] Communication. An IMS will be used to collect and disseminate information to different departments. Once a loan request is processed by the PRO department, they can send accurate/relevant documents to the IPD through the IMS. [3] Decision making. Maxima Investment Company will use an IMS to support decision making by producing only information that is relevant to the process. The IMS will also automate some functions to ease decision making. For instance, it can determine which customers are eligible for mortgages based on available reserves and data from the customer such as their credit rating. [4] Support Operations. An IMS will help Maxima Investment Company to serve its clients in an efficient manner (mortgage processing, payments tracking, credit analysis, etc.) and to gain a competitive edge over competitors through market analysis.

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PART 2

Potential Funding Sources for Maxima Investment Company

The first source of financing for Maxima Investment Company will come from the founding partners who will make use of their savings to finance the initial operations of registration, printing of cards, and marketing. Potential sources of funds for the partners will include community-based organizations dealing with housing and community members as well as family members. Once Maxima Investment Company has established itself through partner funding, the firm will then seek finances to begin operations. Such funds will need to come from low-interest sources.

Maxima Investment Company will then seek operating capital in the form of grants and loans. Sources include charitable trusts, not-for-profit agencies, and developmental agencies. Some of these institutions include the Bill and Melinda Gates Foundation and grants from the US Department of Housing and Urban Development. Such types of sources do not require Maxima Investment Company owners to cede any ownership, and the interest rates are either small or non-existent. Websites such as Grants.gov provide a list of grants available from the federal government.

To expand operations, Maxima Investment Company will seek additional funding from microfinance investment vehicles (MIV). These entities bridge potential investors with micro-lending institutions. Part of the investment from MIVs will be exchanged with equity and the rest will be considered as debt. Maxima Investment Company will also look for venture capital institutions or individuals to finance expansion. This will be marked as investor funds on the balance sheet and will be considered a long-term debt. Another potential technique to increase funding would be to engage in securitization where the mortgages issued are traded as securities to third parties. An Initial Public Offering may also be used if Maximas expansion to the entire Midwestern region is hampered by funding problems.

Refer to Excel Sheet- Year 1-3 sources of financing will include [1] Personal investments totaling $100,000 [2] investor funds repaid at an average of 1.5 percent after year 5 [3] Long-term debt repayable at 2% annually.

Break Even Analysis - Refer to Excel Sheet

The break-even analysis (contained in the Excel Sheet) shows that in the first year, Maxima Investment Company will make losses of up to $18,600. Based on projections the company will break even in the second year where pretax earnings will be $52,328. In year two the interest from loans will exceed interest expenditure and operational costs. Investor funds are not factored in the breakeven analysis since payment will begin after the fifth year of operations.

References

Braniff, L., and Faz, X. (2012). Information Systems: A Practical Guide to Implementing Microfinance Information Systems. Retrieved 4 March 2017, from http://www.fgda.org/dati/ContentManager/files/Documenti_microfinanza/Information-Systems-A-pratical-guide-to-implementing-MIS.pdf

Hall, J. A. (2016). Accounting information systems. Australia: Cengage Learning

Laudon, K. C., & Laudon, J. P. (2016). Management information systems: Managing the digital firm. Harlow: Pearson Education Limited.

Tsiakis, T. (2015). Trends and innovations in marketing information systems. Hershey: Business Science Reference

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