Business Finance – Excellence Electrics Ltd

Added on - 16 Sep 2019

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Business Finance – Excellence Electrics LtdBusiness Finance1
Business Finance – Excellence Electrics LtdExecutive SummaryEEL is not having enough cash and there is a big difference between cash and profit because ofdues from customers and lined up inventory at the London site of business. EEL should try torecover the dues and stop adding inventory at London site, as there is not work going in there,and consume the inventory there by using it or selling it.This report details out the steps ofcapital budgeting process and why it is important to keep formal documentation of it. It states thedifferent methods of capital budgeting and why the chosen method Net Present value isconsidered for selecting or not selecting a project.2
Business Finance – Excellence Electrics LtdTable of contentsIntroduction .................................................................................................................................................. Page 4Findings1.1Profitability, cash flow, need for working capital and how working capital can bemanaged ................................................................................................................................. Page 51.2Capital budgeting stages, Application and analysis .................................................................................................................................. Page 7Conclusion2.1 Difference between profit and cash, working capital application, and how it can beimproved............................................................................................................................................ Page 102.2Conclusion of Capital budgeting steps and which method gives the best answer............................................................................................................................................ Page 10Recommendation........................................................................................................................................... Page 12References................................................................................................................................................................................. Page 133
Business Finance – Excellence Electrics LtdIntroductionThis report is prepared to provide the information about the difference between the cash flow andthe profitability of EFL and how these are shown in the accounts of it. It also puts impact ofworking capital on the company and how it is used in the company and how it can be improvedor financed so that it can be used effectively as per the needs of EFL. It also states, whichmethod of capital budgeting is useful in selecting a project and what are the steps for capitalbudgeting appraisal.4
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