Funding request

Sources of finance is same as project implementation cost. For our company, the
machinery cost for the services is RM 150 000. That is the minimum amount needed to start the
services.
The sources of finance could be internal and external. The internal sources of finance
include equity distributions in cash and/or assets. External sources may include term loan, hire
purchase loan and other sources such as grants, personal borrowings from individual and
companies. The reason is to ensure our project is fully funded and to avoid the risks of underfinancing.
Sources of Finance
A
. Equity Contributions
Cash
B. External Sources
Term loan
C
.

Others
TOTAL SOURCES OF FINANCE

RM
50 000

150 000

0
200 000

The total sources of finance of our business is RM 200 000. Our project is funded by loan
from bank and our own money contributions (as equity). The loan is obtained from SME Bank
Corp. and the money is equally contributed among the partners, which is RM 10 000 per person.
The loan can cover the machinery cost while cash from each partners can cover the expenses of
the dropbox services (such as installation & maintenance) and be ready for any contingencies.

FINANCIAL PROJECTIONS

The business financial is analysed in order to obtain financial position and performance
of the business. Financial part is important as the investors will particularly be interested since
they can measure the performance and growth potential of the business.
In the first year, the revenue is to be around RM 110 000. The revenue is defined as the
price charged to customers multiplied by the number of units sold. It is assumed that the dropbox
services manage to get 50 parcels in one day at cost RM 6 per parcel. For the whole year, we
have 365 days to do the services. Hence, when all of them are multiplied, the total is around RM
110 000. As the revenue RM 110 000 is minus to the expenses (installation and maintenance)
RM 50 0000, the company can get the net profit RM 60 000 on the dropbox services every year.

The business financial data gathered in the financial statements are analysed in order to
obtain an overall financial picture of the business. The main objective is to analyse financial
position and performance of the business. Some of the commonly analysis used are net profit
margin and return of investment.

Net profit margin is calculated by dividing the business net profit by sales.
Net profit margin

= Net profit = RM 60 000 x 100%

Sales
RM 110 000

= 54 %

This ratio of 54 percent indicates that for each RM 1.00 of sales revenue generated, the
company earns 54 sen net profit.

Return on investment (ROI), measures the overall return that the business is able to make on
its assets. The ratio is derived by dividing our business net profit by total assets.

Return on investment = Net profit = RM 60 000

Total assets

x 100% = 40 %

RM 150 000

40 percent indicates that for every RM 1.00 invested, our company earns 40 sen return.
Hence, it needs 2 years and a half for the company to fully get back on what have been
invested on the dropbox services.