Report on Financial Management Strategies for Zylla Limited Operations

This report provides a comprehensive analysis of the financial management practices of Zylla Limited, a company operating ferry services. It explores both short-term and long-term financing options available to the company, including trade credit, bank overdrafts, payday loans, treasury bonds, and term loans, evaluating their suitability for Zylla Limited's operational needs and expansion plans. Furthermore, the report assesses various investment appraisal techniques, such as the payback period, accounting rate of return (ARR), net present value (NPV), and internal rate of return (IRR), in the context of launching a new ferry. It provides practical calculations and recommendations, emphasizing the importance of financial planning and the selection of appropriate appraisal methods for informed decision-making, ultimately concluding that the accounting rate of return method is the best choice for the company. The report also includes a detailed table of contents and references to relevant academic sources.

TASK 4

Table of Contents
INTRODUCTION...........................................................................................................................3
Short term and long term finance for the company................................................................3
Assessment of various appraisal techniques and suggested the operation of brand-new ferry4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Financial administration is the activity which is used to manage and control the monetary
activities present in the firm. Further this department is concerned about the procurement,
allocation and allocation of the financial resources effectively(Grable and et., al., 2019). The
existing study is founded upon Zylla limited which operated different kinds of ferries and help in
crossing services to clients. Along with this, reports covers about the short and long term source
of the finance to carry forward the operational function smoothly. Beside this, it describe about
the different appraisal method which is used in the system to promote the worker for achieving
desire goal.
Main body
Short term and long term finance for the company
The business help the organisation to enlarge the enterprise efficaciously and also assist
in creating sustainable business model. For smooth functioning of the company fund is require to
expand and grow and expand effectively. The main objectives of the Zylla limited is to meet the
daily requirement of the company such resources, financial objectives . This is crucial for the
company to use different sources of finance for as it ensure the stability of entity for the longer
time period.
Shorts term loans:
Trade credit: This is possibly on the most affordable source of obtaining interest free
fund and the company can easily avail the trade credit where the lender can give funds without
incurring any traditional cost. A trade credit has usually extended period of 30 days. For the
company like Zylla the finance department can choose such loan as this help in providing
flexible repayment tenor which allow the leverage of additional time for company to repay loan.
Bank overdraft: This is the facility which provide loan on the current account. With the
overdraft facility the firm can withdraw the money despite the account does not have sufficient

cash in the account. Zylla limited can use such kind of loan as this easy to lend money within the
sanctioned overdraft limit. Much like other loan the interest rate often lower .
Payday loans: The type of loans are more suited for the individual for running the small
business. Under this facilities, the loan amount is determine on the basis on the earning of the
borrowers. Zylla limited can use such kind of loan as these get faster approvals as compared to
other forms of loans. Further this help in improving credit score which improves the credit
worthiness of the organisation.
Long term loan:
Treasury bonds: These are loans which are fixed in terms of repayment which is made
during the purchase of bond. These are used to raise the funds for the organisation at the local
level. Such kind of loans has the maturity date of 30 years and Zylla limited must use such loans
as this involves low risk based on the ability of the company to repay the loan.
Term loans: Business take out the term loan with the bank so they can spread the capital
repayment over the fixed period of time. Typically this kind of loan has has the fixed five or
more than five year for the repayment of loan. In the context of Zylla limited can use such kind
of loan as they are used for long term and thus it is also known as loan amortization.
Assessment of various appraisal techniques and suggested the operation of brand-new ferry
The investment appraisals techniques are mainly done for encouragement and appraising
the performance of the new work and project (Cornwall and et., al., 2019). Zylla limited is
planning to launch new ferry as to expand and increase the sales of the company. The primary
objectives of investment appraisals is top place the value on benefit so that cost can justified.
Further this help in increasing the value of investment and enable the organisation to meet the
current and future need effectively. Here are some of the method which are stated below in detail
manner:
Payback period: This is one the easy method for providing investment funds appraisals
method. It is the easy method for assessing an finance by the dimension of time it would take to
repay it. Zylla finance department can use such method which help in payback for the new ferry.
Hence this usually seems as the default techniques for the smaller business like Zylla and focuses
on cash flow.
Accounting rate of return method: Accounting rate of return or 'ARR' describe the
profits you evaluate to make from an finance to the amount you need to spend. Zylla limited

should focus on this method as it is easy to calculated on annual profit regrading the investment
done of project.
Practical aspect for Zylla Limited:
Payback Period (PP): It is mention to the period of time which necessary to acquire the
initial cost of investing. Lower payback period will be chosen because it is advantageous for the
organization.
Payback Period = Cost of Project / Annual inflow
Cost of Project = Investment – Scrap Value
Net present value (NPV): This is the variation of actual value of cash influx or current
value of cash outflow. It help the system to standard their existing value after the finance.
NPV (Net Present Value) = Cash Inflow – Cash Outflow
Internal Rate of Return (IRR): It is a involvement rate where all the cash flow of net
present value is equals to the zero. Fundamentally is used for the valuation which supply the
message weather task is good or not to invest.

*Working Notes: -
Cost of Project = Investment – Scrap Value
= 150000 – 45000
= 105000
Annual Inflow = 55230 + 70045 + 88375 + 79870 + 57555 / 5
= 351075 / 5
= 70215
Payback Period = Cost of Project / Annual inflow
= 105000 / 70215
= 1.49 years.
As the given report this has accounting rate of return method should be used as this help
in managing the inflow along with the out flow of cash effectively.
CONCLUSION
This has been concluded from the above report for investment organisation must indulge
in proper planning for expanding the business. Apart from from this firm should consider long
term loans as they feasible and secure for availing loan. At last the accounting rate of return
method is help in maintaining the cost for the longer time duration.

REFERENCES
Books and Journals
Cornwall and et., al., 2019. Entrepreneurial financial management: an applied approach.
Routledge.
Ge, S. and Weisbach, M.S., 2019. How financial management affects institutional investors’
portfolio choices: Evidence from insurers (No. w25677). National Bureau of Economic
Research.
Grable and et., al., 2019. The moderating effect of generalized anxiety and financial knowledge
on financial management behavior. Contemporary Family Therapy, pp.1-10.
Shapiro, A.C. and Hanouna, P., 2019. Multinational financial management. Wiley.
White and et., al., 2019. The Relationship between Financial Knowledge, Financial
Management, and Financial Self-Efficacy Among African-American
Students. Financial Management, and Financial Self-Efficacy Among African-
American Students (October 12, 2019).