Contents

1. Introduction....................................................................................... 2
2. The various sources of finance available to Barkley Logistics............2
2.1 Business Finance..........................................................................2
2.2 Borrowing from the Bank..............................................................3
2.3 Other ways of borrowing...............................................................5
4. The costs of different sources of finance available to Barkley logistics
............................................................................................................... 6
5. The importance of financial planning to Barkley logistics..................6
5.1 Cash Management........................................................................7
5.2 Long-Range View..........................................................................7
5.3 Spotting Trends............................................................................. 7
5.4 Prioritizing Expenditures...............................................................8
5.5 Measuring Progress.......................................................................8
6. The information needs of different decision markers.........................8
7. The impact of finance on the financial statements............................9
8. Conclusion......................................................................................... 9

Finance means money. We all need it and use it every day, and
we are all very interested to know where we can get more it. The

sources of finance are government aid, business owners, and

other ways of borrowing and borrowing from the bank.
2.1 Business Finance
Businesses are set up with the object of making profits for their
owners.
(a) The business has some money of its own to buy the initial
stocks of sweets and cigarettes and newspapers and to pay
bills like rent and electricity.
(b)The business borrows money from the bank you might
get your bank to agree to get you have an overdraft some
of the time to tide you over periods when you has paid for
stock but not yet sold it on to customers.
(c) Some businesses are helped out with their financing by
Government grants.
(d) Some businesses receive money from venture capitalists
or from private individuals known as Business Angels.
(e) All businesses will generate money by making sales. Some
of this money will then be used to pay interest to the bank
on its lending and to pay off part of the amount loaned.
Our Barkley logistics should be use the other ways of borrowing
and borrowing from the bank.
2.2 Borrowing from the Bank
Banks are a major source of finance for all businesses, providing
finance for starting up, running the business and for expansion:

loans can be short-term, medium-term or long-term,

depending on need.

mortgages are long-term loans for the purpose of buying

fixed assets such as buildings and equipment.

Overdrafts are short-term loans with limited duration which

can help the day-to-day running of the business.

Our Myanmar country`s companies usually use the bank

loan for their venture. To get the bank loan, it is very difficult
matter. Banks do not lend their money to anybody who comes to

the bank. They apply certain well-tested principles of lending are

(a) They look at the character of the person or business asking
for the loan.
(b)Is the borrower able to repay? the bank think. In
business, it is a profitable one and there are enough spare
profits to be able to afford the interest and the periodic
repayments of portions of the loan.
(c) If the bank itself has to pay out 8% interest to people who
deposit money in their accounts then it will have to charge
more than 8% interest to people who borrow money. In
Myanmar banks, they give 8% interest to the people who
deposit money in their accounts and take 13% interest
from the borrower.
(d)The bank will want to know the purpose of the loan.
Because of they decide to the loan which should be borrow
or shouldn`t borrow.
(e) The amount of loan is partly dependent on mortgage which
the borrower pays as a security. Banks pay to the borrower
as much 80% of mortgage value in market value.
(f) The repayment terms of the loan are very significant.
These do not just include how long the loan will continue
(say, for three or five years) and how much of each regular
payment is capital, and how much of interest, but also the
circumstance in which the bank can call in the loan early.
For instance, the terms may state that the entire loan
should become repayable, with penalty interest, if more
than two consecutive payments are late.
If you are going to borrow from the bank, you need to
consider about the advantage and disadvantage of the case
bank loan.
Advantage

Borrowing
from
the
bank

Bank
overdrafts

Bank loans

Help with cash

flow
Don`t need to pay
security
Larger sums to
invest or expand

Disadvantage
Repayable
on
depend
- Often high rate of
interest
Need to pay security
as mortgage
-

2.3 Other ways of borrowing

Factoring
If a business`s sales are rising rapidly, its total debtors will rise
quickly too and if a business grants long credit to its customers,
there definitely is going to be a strain on the cash flow. That is
time when we use the factoring. Factors are organizations that
offer their clients a financing service to overcome these
problems. It also has a debtor management service. However,
interest will be charged on the amount of funds advanced.
Invoice discounting
Invoice discounting is the purchase of a selection of invoices, at a
discount. The invoice discounter does not take over the
management of the business`s debtors`.
Leasing
A lease is an agreement between two parties, the lessor and the
lessee. Leasing is a form of rental.
Hire purchase
Hire purchase (HP) is a form of borrowing whereby an individual
or business purchases goods on credit and pays for them by
installments. The HP contract is arranged by the vendor of goods
but is usually between the customer and finance company.
Franchising
Franchising is the means by which a large number of chains have
grown very rapidly in the last decade. The franchisor has a
successful business and instead of establishing branches under
its own name it licenses franchisees to use its name, corporate
identity and so on.
The appropriate source of finance is that the bank loan is better
than the other ways of borrowing for Barkley logistics. Because
the bank loan interest is less than the other ways of borrowing. If
the interest rate will decrease, the profit will increase. And then
your get more profit, your logistics will increase.

2.1. The costs of different sources of finance available to

Barkley logistics
Our logistics can use above the two ways; there can be the cost
of lending money. The cost of debt financing (loans) is interest.
The cost of equity financing (investments) could include
dividends or a share of the profits. Comparing the two may
involve a cost of capital calculation and analysis. You would in
effect compare the interest charges on a loan with the
percentage of your companys retained earnings or accumulated
profits that really belong to the investor.
If you can obtain loans from different banks, compare the
interest rates and payment terms they offer. You may want to
determine the total interest cost over the life of each loan to
have a comparable base. Small differences in the interest rate
can add up to significant amounts over a long-term loan. Keep in
mind that short-term unsecured loans, such as lines of credit,
generally carry a higher interest rate than long-term secured
loans, such as mortgages.
If we use the bank loan for Barkley logistics, interest is the main
cost. If we take out a loan of $100,000 and pay 13% interest, the
cost $13,000 per year and we need to pay regularly for interest.
Apart from this, we use the other ways of borrowing, we need to
pay high interest rate more than bank loan interest rate.
2.2 The importance of financial planning to Barkley
logistics
Financial planning is a systematic approach whereby the financial
planner helps the customer to maximize his existing financial
resources by utilizing financial tools to achieve his financial
goals.
Going through the process of constructing a financial plan is a
valuable exercise for any business owner. The financial plan, or
budget as it is also called, helps guide the day-to-day decision
making of the business. Comparing forecast numbers to actual
results yields important information about the overall financial
health and efficiency of the business. Even a one-person
company needs to have a financial plan in place.

5.1 Cash Management

Many businesses have monthly or seasonal variations in
revenues, which translate into periods when cash is plentiful and
times when cash shortages occur. In building the financial plan,
the owner takes these cycles into account to keep a tight rein on
expenditures during the forecast low revenue periods. Poor cash
management can result in negative consequences such as not
being able to make payroll. Having a financial plan is structured
always a cash cushion helps. The cash cushion allows the
logistics to take advantage of opportunities that arise, such as
the chance to purchase inventory from a supplier at temporarily
reduced prices.
5.2 Long-Range View
In business it is easy to become focused on the crises or
issues that must be dealt with on a daily basis. The price for
being too short-term oriented is that the owner may not spend
enough time planning what needs to be done to grow the
business long-term. The financial plan, with its forward looking
focus, allows the business owner to better see what expenditures
need to be made to keep the company on a growth track and to
stay ahead of competitors. The financial plan is a blueprint for
continual improvement in the company and performance.
5.3 Spotting Trends
A business owner makes so many decisions over the
course of a month that it can be difficult to tell which decisions
resulted in success and which ideas or strategies did not work.
Preparing the financial plan involves setting quantifiable targets
that can be compared to actual results during the year. The
owner can see, for example, whether an increase in advertising
expenditures led to the hoped-for jump in sales. Trends in the
sales of individual products help the owner make decisions about
how to allocate marketing dollars.
5.4 Prioritizing Expenditures
Conserving financial resources in a small business is a critical
element of success. The financial planning process helps a
business owner identify the most important expenditures, those
that bring about immediate improvements in productivity,

efficiency, or market penetration, versus those that can be

postponed until cash is more plentiful. Even the largest, most
well-capitalized corporations go through this prioritization
process, comparing the cost to the benefits of each proposed
expenditure.
5.5 Measuring Progress
Especially in the early stages of their ventures, small business
owners work long hours and deal with numerous challenges. It
can be difficult to tell whether progress is being made or whether
the business is mired in mediocrity. Seeing that actual results are
better than forecast provides the small business owner needed
encouragement. A chart showing steady growth in revenues
month by month, or a rising cash balance is a great motivating
factor. The financial plan helps the owner see, with the clarity of
hard data, that the business is on its way to being a success.
2.3 The information needs of different decision markers
The information needs for decision markers. Sometimes the
decision markers can get useful information from other
statements in the account. As the example of a cash flow
statement shows, that notes can tell you hows the organization
are going on. If the bank looks your logistics the financial
statements, they decide that can or can`t allow the bank loan.
For the owner, you need to know the daily transaction, profit and
loss account. Thats why, you must need to know every detail
information of the bank for your Barkley Logistics business.

2.4. The impact of finance on the financial statements

Businesses regularly put out financial statements such as
the income statement, balance sheet and statement of cash
flows. When these financial statements are released, they can
have large impacts on the business and on the investors of the
company. So that, the information must be correct and cannot
have any small mistake.

The balance sheet is a statement of the assets, debit,

credit and capital of a business at a given moment in time. The
balance sheet can also be called the Statement of Financial
Position. Sometimes it is called the position statement, because
it shows the financial position of a business at a given moment. A
balance sheet is prepared to show the assets, liabilities and
capital as at the end of the accounting period to which the
financial accounts relate.
A profit and loss account is a record of income generated
and expenditure incurred over a given period. The profit and loss
account can also be called the Statement of Financial
Performance the statement of the comprehensive income. You
want to get the bank loan, the interest will be increased. It will
reduce your profit.
A cash flow statement explains differences between profit
and loss, and also shows where a business gets its capital from
and what uses it puts the capital to .If the profit percentage
increased over your estimate, the company will have a positive
reaction.
8. Conclusion
Here this is my report for Barkley logistics. I suggest to you
that you must try to get the bank loan first. And then you can
expand the Barkley logistics and you can pay the salaries for
your employees. Next one, you should be always to known the
financial statement and the all information. If you will known,
your logistics get good case and more profit. If you want to
change the new place, you get the more profit from the logistics.
But you dont change new place now because the cost will be
high. I can tell sure you, if you must be try to check your daily
income and make sure your profit and loss account for your
business, your logistics will be rotate well.

References
1.