Detailed Analysis of Almarai Company's Financial Strategies Journal

This journal entry provides an observation and analysis of Almarai Company's financial strategies. The author focuses on the company's cash collection methods, highlighting how prompt customer payments facilitate efficient fund rotation. The journal also examines the company's reliance on both internal and external funding sources. Internal funds are represented by share capital and reserves, while external funding includes loans and borrowings, which are considered a liability due to associated charges. The journal references the 2017 Annual Report & Accounts of Almarai to support its observations and conclusions regarding the company's financial practices. The analysis underscores the importance of effective cash management and the strategic use of diverse funding sources for the company's operations and growth.

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JOURNAL

Journal
I made my observation on Almarai, a pioneer in the consumer goods that is located near to
my home. From the observations, I was clarified that the cash collections was the major way
through which the company made better cash projections. When the customers pay quickly
then a major source of cash is observed and this helps the company to rotate the funds with
ease and flexibility (Almarai, 2017).
Further, I learned from the progress of the company that the company relies both on internal
and external funds as it helps the company to progress. Loans and borrowings procured by is
present in the form of debt. Such loans and borrowings are taken from the external parties
that boost the functioning of the company. Further, bank overdraft is even present in the
balance sheet that implies that the company is using the funds provided by the banks
(Almarai, 2017).
Hence, the observation that can be made in the case of Almarai is that the company is having
a reliance on both internal and external source of funds. The presence of capital in the form
of share capital and reserves is witnessed termed as internal source of fund. The internal
source of fund available to the company is simply an advantage to the company while the
external sources project a liability. It is due to the fact that the external sources are procured
by payment of hefty charges. However, Almarai is utilizing both the sources for the smooth
running.
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Journal
References
Almarai. (2017) Almarai 2017 Annual report & Accounts. Available from:
https://www.almarai.com/wp-content/uploads/2018/01/Financial-Statements-2017-EN.pdf
[Accessed 13 March 2019]
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