University Report: Accounting in Context for CarSales.com Ltd

This report analyzes the financial strategy of CarSales.com Ltd, an online car sales company, as it seeks funding to open new showrooms in Sydney and Melbourne. The company has chosen Australia and New Zealand Banking Group (ANZ) for a loan of $100,000, needed in two installments. The report assesses the company's financial position, highlighting its history of profitability, positive cash flow projections, and existing assets. The report examines projected cash flow, emphasizing the initial investment expenses and expected profit increase after the showrooms become operational. The expansion is expected to boost customer interaction, brand value, and customer base. The report references several academic sources that cover topics like digital transformation in the automobile industry, non-contractual business relations, business models for sustainability, and promotional methods used by car dealers.

Running head: ACCOUNTING IN CONTEXT
Accounting in Context
Name of the Student:
Name of the University:
Author’s Note:

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ACCOUNTING IN CONTEXT
Task 4
It is seen that CarSales.com Ltd has created a new idea of opening up new car showrooms in several of parts of Sydney and
Melbourne and therefore are in need of additional funding from financial institutions with the help of which they would receive money
that can be invested in order to establish their new showrooms. There are several sources of funding that are available to the company
but the company has to select the funding company based on the image of the funding organzaiiton and their past records and their
own aims and objectives. In order to undertake the process of funding, profit outcome and the other benefits in accordance to the
investment can be assessed.
In this manner, it is seen that CarSales.com Ltd is an online based car company that has been providing various kinds of car
related services like the purchase, sales and research on the cars. The company has a name in the economy and has been making
significant amount of profits within their line of business. In the current time period, it is seen that CarSales.com Ltd developed the
idea of establishing their own car showrooms with the help of which the customers can visit the showroom and purchase and sell their
cars by examining them by their own self. In order to construct the new showrooms funding is required and the company has selected
Australia and New Zealand Banking Group (ANZ) as this is the bank that has been operational in the market for more than a decade.
They provide banking as well as financial lending services thereby reducing the burden of work related to the transactions and all the
records can be maintained in an effective manner. CarSales.com Ltd would look to make use of dual services by maintaining and
thereby maintaining effective investment relationship with the banks.

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ACCOUNTING IN CONTEXT
The management of CarSales.com Ltd have projected that in the initial years the extent of profit outcome would be a bit low
but thereafter there would be significant rise in the extent of profit for the company as the company would be able to reach out directly
to the customers and the customers can interact with them face-to-face thereby having a better working environment. The rise in the
extent of profit would lead to the development of the other benefits as well like the showroom would be able to expand their business
and bring in positive changes that would be able to satisfy the customers more. The brand value of the company would increase as
well and as face to face communications would increase at a fast pace, there would be rise in the customer base for the concerned
organization.
The company is in the requirement of a fund worth $100,000 in order to open their first showroom and the fund would be
needed in two equal instalments. The cash inflows and the cash outflows of the company comprise of the income and expenses they
incur and it is seen that there is a rise in the expense in the initial time period in order to set up the business. The extent of income will
be lower than the expenses initially but after the company is able to set up their showroom properly they would be able to attain profit.
The first instalment of the fund will be required during the time of setting the business and after the business has been settled, the
company would ask for the second half of the investment in order to initiate their operational activities.
In order to get the loan sanctioned, it is essential to provide a proper justification to the bank regarding their current financial
position and it is seen that the profit history of the company has been extensively good as the company has been making profits for
several years and has been one of the leading online car retail business in the country. The cash flow projections have indicated that

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the company would be making profits even in the coming time period and has sufficient amount of existing resources and assets with
the help of which they would be able to provide a security for the loan amount. The non-financial data like the effective level of
management structure, good customer base and good reputation in the market makes the company eligible for getting the loan so that
with the help of this loan the company would be able to expand their business and reach to the consumers who do not prefer any kind
of online transactions.

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Projected Cash Flow Statement

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Bibliography
Hanelt, A., Piccinini, E., Gregory, R.W., Hildebrandt, B. and Kolbe, L.M., 2015. Digital Transformation of Primarily Physical
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Mobility (pp. 92-102). Routledge.
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108). Routledge.
Zolkifly, N.H., Yusof, N.L.H.M. and Baharom, S.N., 2017. Promotional Methods Taken by Car Dealers: An Investigation of
Traditional Marketing and Online Media in National Car Showroom. International Journal of Academic Research in Business and
Social Sciences, 7(11), pp.1462-1472.