Zylla Limited: Long-Term & Short-Term Finance and Investment Appraisal

This report examines the financial strategies of Zylla Limited, a UK-based ferry service company, as it seeks to expand its operations by purchasing a new boat. The report explores both short-term and long-term sources of finance, including trade creditors, bill discounting, factoring, owner's savings, bank loans, and debentures, essential for meeting the company's working capital and investment needs. Furthermore, the report delves into investment appraisal techniques such as Payback Period (PP) and Net Present Value (NPV) to assess the profitability and viability of the investment. The analysis aims to provide a comprehensive understanding of Zylla's financial planning, emphasizing the importance of effective financial management for achieving organizational goals and sustainable growth. The report concludes by highlighting how the proper application of finance sources and investment appraisal techniques ensures productivity, profitability, and long-term sustainability for the company.

Business Scenario For
Individual Report

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Long and Short terms finance sources ...............................................................................1
2. Investment appraisal techniques.........................................................................................2
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
Zylla limited is established in UK that conduct different types of ferries in numbers. The
company has been providing services to common people who wants to crossing river. Along
with it helps to move luggage, vehicles and many other things from one side to another side. In
present time the business wants to increase their services so management decided to purchase a
brand-new boat to cater for the accumulated demand. For this business require long as well as
long term sources of funds to fulfil the requirement of working capital. In addition examine
techniques of investment to measure profitability of business.
MAIN BODY
1. Long and Short terms finance sources
Short term sources of Finance: Short term sources of finance is mainly undertaken for project
and need of shorter span of time (Laird and Venables, 2017). In addition to this, this form of
capital is also termed as working capital finance as in this organisation hold the responsibility to
effectively maintain funds as per in accordance with task requirement. Short term sources of
finances that can be undertaken by Zylla as to fulfil organisational goals and well as objectives in
well defined manner.
Trade creditors: It is consider as most important finance source within which
purchasing of goods is being done from suppliers without any from of immediate payment. With
the assistance of this Zylla can effectively able to accomplish organisational goals. In addition to
this, entity cab fulfil their working capital requirements and short term financial needs in well
defined manner.
Bill Discounting: With the assistance of this from of source of finance Zylla can
effectively able to accomplish their working capital requirement in best effective manner on
regular basis. In bill discounting seller get amount of sale before due date from intermediator.
Factoring: In this form of source of finance financial transaction mainly undertakes
among the third party and owner. With the help of this instead cash can be acquired by entity as
to effectively fulfil their daily basis operations in well defined time frame.
Long term source: It mainly involve instruments that get mutual after a year and further include
public as well as private funding and duly have 1 year or more than to pay. Mentioned below
there are different types of long term sources:
1

Owners saving: This form of funds are those that are being invested by individual or
group in the business of sole trading or partnership. In this individuals invest their own money as
to fulfil organisational needs. In context with organisation invested capital is duly termed as
share capital. With the help of this long term finance source Zylla can fulfil their operations in
well defined manner.
Bank loan: In order to fulfil working capital requirement organisation acquire funds
from bank in the form of long. They mainly undertake large base of funds for long period of time
as to fulfil organisational objectives in a well defined manner. With the help of this mode Zylla
can effectively able to accomplish their working capital requirements in best effective manner. In
addition to this, with the help of bank loan organisation can undertake their task in a well defined
manner and in within perfect time frame. This will further aid in performing organisational
operations as well as activities in best effective manner.
Debenture: This is mainly consider as corporate finance within which an entity borrow
funds at a fixed rate and further pay interest on it. It is also one of the most effective long term
source of finance with the help of which Zylla can ensure effective accomplishment of their
organisational operations in well defined manner.
2. Investment appraisal techniques
Investment appraisal is defined as aggregation of techniques that utilised by business to
recognise formative attraction of investments (Johnson, Pfeiffer and Schneider, 2013). The main
reason of investment appraisal is to analysis the practicality of particular project, programme of
portfolio decision and generate value. It has been identified that by undertaking use of apprails
techniques organisation can duly able to accomplish their operations in well defined mannber. In
the context of Zylla company use different types techniques for the project assessment.
Payback Period (PP): It is mainly consider as a time period that is basically required to
retrieve initial cost of investment. It has been identified that lower payback period is being
undertaken as it duly proves to be beneficial for entity.
Net present value (NPV):
2

3

= 1.49 years.
4

CONCLUSION
Present report stated that, with the help of long term and short term source of finance
organisation can effectively be able to fulfil their finance needs in best effective manner. It is
essential for an organisation to duly maintain working capital that are required on daily basis as
to effectively execute organisational functioning in well defined manner. With the effective
identification of financial sources company can ensure smooth and effective functioning of
organisational operations. Further this report include techniques of investment appraisals with
the help of which manager of entity can ensure that project is beneficial or not. Further it has
been identified that there are number of techniques as well as methods with the help of which
organisation can effectively able to ensure productivity, profitability and long term sustainability
in well defined manner.
5

REFERENCES
Books & Journals
Andor, G., Mohanty, S. K. and Toth, T., 2015. Capital budgeting practices: A survey of Central
and Eastern European firms. Emerging Markets Review. 23. pp.148-172.
Johnson, N. B., Pfeiffer, T. and Schneider, G., 2013. Multistage capital budgeting for shared
investments. Management Science. 59(5). pp.1213-1228.
Kafuku, J. M., Saman, M. Z. M., Sharif, S. and Zakuan, N., 2015. Investment decision issues
from remanufacturing system perspective: literature review and further
research. Procedia CIRP. 26. pp.589-594.
Laird, J. J. and Venables, A. J., 2017. Transport investment and economic performance: A
framework for project appraisal. Transport Policy. 56. pp.1-11.
Singh, S., Jain, P. K. and Yadav, S. S., 2012. Capital budgeting decisions: evidence from
India. Journal of Advances in Management Research. 9(1). pp.96-112.
6