Chapter: 1

Introduction

Day by day the competition within the business world is increasing with a
fast speed. So, now every business organization is trying up their best to
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compete with each other neck to neck. But, if any organisation does not
utilize the sources of finance for their different funds and does not search
out for any reliable source for getting financial support, the organization
will not be able to manage or, run the business properly. From the
beginning of any business the finance sources are the first prior able
factor. Not only that, the day to day running expenses are also done by
the help of the finance. The salaries of the employees, their incentives,
the expenditures for the equipments and so on are needed to be financed
by the funds of the organization.
There are many financial sources for every business. We have classified
them into two sections: External and internal. Both sections have many
resources to get funds for running a business properly.
So, it is most important to plan the financial side of the business to be
able to keep up the progress of the business. Except this, if the financial
position of any business is not in a proper figure the management of the
business will face huge draw backs.

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Chapter: 2
Background of the Study

2.1: Objectives of this study: There two types of objectives of the

study.
Broader objective: The broader objective of this study is to understand
the importance of finance for business.

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Specific objective: the specific objective of this study is to explore the

sources of finance which are available to a business and another objective
is to understand the proper implications of the sources.

2.2 Methodology: For making this report we have used Websites of the
company which we have chosen to analyze. We have also used Google as
search engine.

2.3 Area of the study: We collected information from The official

website of Dekko group.

2.4 Target group: Female customers, who are aged about 21 to 45.
2.5 Sources: We collected the information by using the corporate
website of Dekko group.

2.6 Scope of the report: These topics mainly deal with the things we
did during the making of this report. It is basically the overall view of the
Dekko groups financial planning for their business. During the study we
have gathered lot of ways of information of their business process and
financial sources.

2.7 Limitation: To make this report we had some limitations. We couldnt

use the different books of business. We had to use only Google as search
engine to get the information our chosen company.

2.8 Rationale of the study: Benjamin franklin said, An

knowledge

always

pays

the

best

interest.

investment in

(famous-ben-franklin-

quotes-money-finance)

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Chapter: 3
Organisational overview

3.1 Company profile: Dekko group is doing the business of

manufacturing and marketing of biscuits, snacks, sticky noodles, powder
drinks, chutneys, oils and basic spices for over 8 years. They also export
their products, especially the spices to 13 countries of the world. Their
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manufacturing location is at Savar and their other departments like,

marketing, finance, sales, commercial, IT and human resource managing
departments are located in their main head office in Dhanmondi 27 (old),
Dhaka.

3.2 Objectives of Dekko group:

Deliver WOW through taste
Spirit of Family and Fun
Embrace and Drive Change
Be Adventurous, Creative, and Open-Minded
Pursue Growth and Learning
Build Open and Honest Relationships With Communication
Build a Positive Team and Family Spirit
Do More With Less
Be Passionate, Honest and Determined
Be Humble (dekkofoods.com.)

3.3 Mission:
To provide great taste and deliver best to everyone. (dekkofoods.com.)

3.4 Vision:
Our goal is to ensure the availability of healthy food options for all parts of
the society. Our vision is to meet customers expectations and make food
an easier, healthier and more enjoyable component of life.
(dekkofoods.com.)

3.5 Products: Dekko spices, Dekko biscuits, Dekko Lascha,

Dekko instant drinks, Dekko noodles, Dekko snack pack, Dekko
oil, Dekko chutney.
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Fig:1: Products of Dekko

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Chapter: 4
Analysis and Discussion

For this report as we have chosen Dekko group to work with, we have
firstly identified the external and internal sources of finance to extend
their business.
Dekko Foods Limited is engaged in the manufacturing and marketing of
Biscuits, Snacks, Stick Noodles, Powder Drinks, Chutney, Oils and Basic
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Spices. They are quite well known and in a competitive position in the
branded biscuits

business

both in Bangladesh and abroad. Their

manufacturing site is situated in Savar along with 1500 employees

working over there. They also produce some of the best known cream
variants, plain and ingredients based biscuits. Since maintaining good
quality products is their major obsession, the quality of their food products
provides the premium degree.

Task:1 Identification and evaluation of Dekkos internal and

external sources of finance:
Internal Sources of Finance:
Personal Savings: It is the amount of money which is being used by the
owner of the company to settle down his/her financial problems. Since
Dekko foods limited, is a private limited company which involves lots of
shareholders and it does not run by a single owner so personal savings
will not be a suitable source of finance for Dekko.
Retained Profits: When a company distributes all the dividends among
its shareholders, the remaining part of the profit is retained profits. It is
also known as undistributed profits of a company. As Dekko is a
developing food industry in Bangladesh, so to capture the whole market
they need to open more outlets inside the country. In that case, they use
their retained profits for their companys development.
Working Capital: It is the sum of money that a business uses for its daily
purposes. It ensures that sufficient cash is available to meet day to day
cash requirements. A company gets this amount of money by deducting
all the current liabilities from its current assets. Dekko uses the working
capital by giving the wages of the labor every month and other
miscellaneous expenses which includes their day to day activities.
Sale of fixed Assets: Fixed assets are the valuable items for every
company. These assets can be sold to raise finance in typical situation for
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the business. With the help of selling fixed assets a business can pay-off
its debts and even finance new activities. Dekko faces some financial
losses and to recover that loss of the business they sell their unused asset
which is a good source of finance.
External Sources of Finance:
Ordinary shares: Shareholders who are the owner of the company and
have the voting rights and have bear the loss and profit of the company.
As Dekko is a private limited company they cannot issue ordinary shares
and they do not use this source of finance.
Preference shares: These shareholders are the people who are not the
owner of the company and do not have to bear loss and have no voting
power but still the company have to pay dividend to their preference
shareholders even if the company are making small profits. Dekko has
preference shareholders within their organization. They just issue shares
for their employees.
Debentures: It is a long term source of finance with fixed interest rates
and it has to be paid to the creditors on time even if there is no profit.
Launching new products is quite costly and Dekko uses debentures while
introducing any new products in the market.
Bank overdraft: It is a short term credit facility provided by banks to
withdraw more money than their bank account balances hold. Dekko uses
bank overdraft while giving the payments to their suppliers as the bank
account does not have enough money all the time to pay them.
Loan: It is a large amount of money borrowed from the bank by giving
interest every month. Dekko takes bank loan for buying fixed assets and
to expand their business. It is very useful source of finance.
Lease: This is a long term source of finance. It is also known as long term
rent. This long term rent can be taken for a long period of time and being
used in the business in returns of money. Dekko took lots of land in lease
while starting up their factories and manufacturing operations.
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Venture capital: The Company which invests in other developing

companies to promote and in exchange they took shares of the profit
made. As Dekko is doing quite good business in Bangladesh so they do
not need any venture capitalists.
Trade credit: When a company buys raw materials and other essential
items in credit and pays the money in later date is known as trade credit.
Trade credit is a short term external sources of finance. Dekko uses trade
credit while buying raw materials from other businesses and pay them
later.
Grants: The amount of money or fund given by the government to any
company to benefit the community. Government gave grant to Dekko for
opening

factories

in

different

parts

of

Bangladesh

to

diminished

unemployment.

Task: 2(a) A new extension decision for Dekko group.

Dekko group is manufacturing and doing marketing in the field of foods
and beverage; they can try up to extent their business with a new
decision. As, investment counselors of Summit ltd. Company, we
suggest Dekko group to extend their business with the marinated
frozen foods; which would contain their own manufactured spices.

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Fig: 2: Frozen foods

(b) Analysing the potential sources of finance to execute the

decision and the impact of these sources in the downward
economic trend in the economy.
The sources Dekko group can use for extending their business are, bank
loan, lease, trade credit.
Bank loan: Dekko group can take financial help from the banks. And
they would need to repay back that money after a certain period of time
with a fixed interest rate. They can take the loan to buy the machineries
and necessary equipments to produce the frozen foods.
Lease: Dekko group can take lease any area to use as their production
area for the frozen goods.
Trade credit: Dekko group can get support from their respective
suppliers. They can also take the raw material for the frozen foods from
any new suppliers like, they can take the chicken from Aftab firm or
BRAC firm. When the suppliers will find the company reliable and has a
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good transaction, they would help the Dekko group in producing the
frozen goods.
There are also many other financial sources for Dekko group to raise the
funds for their new business extension. But, these sources would not be so
easier way to run the business.
Venture capital: As the Dekko group is extending their business through
introducing the frozen foods; they wont need to take help from the
venture capitalists. Venture capitalists invest in those businesses which
are going to operate any new department.
Grants: To get the grants from the government Dekko needs to do the
business more widely.

Task 3 (a): Importance of financial planning:

As an Investment Counselor for us financial planning will help determine
short and long-term financial goals and create a balanced plan to meet
those goals. May be Profit will always not be stable for a business in same
height but to maintain that profit financial planning will help to guide in
future. So financial planning is called a backbone of a successful business
and financial planning is very important for each and every business.
There are some important points which have to be followed in financial
planning.
Cash Flow: Business has to take care of cash flow and have to do early
budgeting. Cutting the expenses, tax planning and monitoring spending
habits as much as can will help a lot for cash flow.

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Capital: There should be a good capital base for shape a better financial
planning in future so that anyone can get interest easily to invest on the
business because, capital is one of the main element for starting a new
business.
Income: All the income should be dividing in tax payments, expenditure
and in other monthly expenses. Rest of the money which will leave would
be the savings. So that it can help in futures and increase cash flow.
Family Security: Like before when a worker retired they used to get a
nice amount of pension which seems to be gone nowadays. In this case
family futures security depends on financial planning and also can get
help from different kind of policies which can smoothly find in market
these days.
Investment: A better investment planning can take the goal from the
dreams into the realities. Just have to choose the right investment policy
in right time with planning.
Standard of Living: As like as family security, maintaining a good quality
of living also depend in financial planning. We never know the future.
Anything can happen with the head of the family or may be lost income.
So having a savings through the family financial planning will help a lot
when it will need the most. It will work as a shell in hard time and improve
the family's standard of living.
Financial Understanding: Having full of control of financial lifestyle one
can easily have a risk free investment in future and can retirement plans
for future with financial understanding and planning as well.
Assets: By financial planning have to take care that build an asset would
not be unexpected financial burden on future. We will forget in the joy of
having asset but that may be able to come with liabilities. If we have a
proper plan of finance from the beginning then easily can get the true
value of an asset.

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Savings: Savings can help in so many purposes in future. For children's

education,

for

retirement

planning

and

unexpected

emergency

occurrences can happen in any time. It has to be always very liquid so

that it can be easy to convert that fund into cash and can be used.

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Chapter: 5
Case study

Task 3.2 (a): A situation where Dekko faced cash inflow and
outflow problem.
In July 2011, Dekko faced an unwanted situation. As, dekko company uses
the Turmeric which are produced in the hilly area of Khagrachari, which is
about 16,000sqft. During the rainy season all of a sudden the area where
the turmeric is being produced got flooded and thus, they faced a huge
loss in the production. Then, they again took lease another area where
they started to produce the turmeric. During that time, they sold half of
their previous land. On that month, Dekko faced loss of about 45 lacs
taka.
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July
Balance B/F

August
1, 00,000

Add: Cash receipts

Sales

1, 00,000

Sales of assets

3, 00,000

Total Receipts:

5, 00,000

Less: Cash payments

Purchases

30, 00,000

Tax

10, 00,000

Interest

10, 00,000

Total payments

50, 00,000

Net cash flow:

(45, 00,000)
Fig: 3: Sample cash budget

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Chapter: 6
Findings

Task 3.2 (b): The steps which are should be taken by Dekko to
overcome the situation.
Management of Dekko Company needs to prepare the budget
or the cash flow more efficiently.
They need to do marketing on their products to attract or
grab the attention of general people.

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 They need to take trade discounts from the suppliers , which

can help them to reduce the operating expenses.
They need to focus more on their other products.
They can take debentures provided they should pay the
interest in time, taking long term loans will help them to
finance the deficit they have incurred for the month of July.

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Chapter: 7
Recommendations

Task 4: Sources to get the reliable information for different

external parties.
A business cannot run by only one. There are so many internal and
external parties involved in every business. And every person involved
with the business can see the businesss financial statement or
information for their own necessary. People who are not related directly
into the business but involved with it anyhow are called external users or
parties, they include investors, suppliers or trade creditors, lenders,
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customers, government and they use the financial information to satisfy

their different needs for information.
Pressure Group: They are interested about the information because it
will help them determine whether the business is following the ethical
rules such as policies regarding treatment of disabled or payment of
creditors. Definitely they want to make sure that the business is not
exploiting the rights of any stakeholder and they might decide to
pressurize the company operate in accordance to the rules required to be
followed.
Suppliers or trade creditors:

Suppliers or trade creditors are

interested for the information that business is eligible to pay their

obligation when they become due. They also want to know about
businesss liquidity.
Lenders:

They seek information that company is able to pay liabilities

when it comes mature. If it is loan then they want to know company can
pay their interest on time and others information as in companies
profitability, liquidity.
Customers:

Some time customers have a long term involvement or

dependent on the company. And get interest in information to know about

the business stability. Customers also want to know companies financial
history to make sure they are choosing the best one for them.
Government: Government are require information to see that company
are income tax payable and also paying other taxes and maintaining other
policies regularly and not breaking rules.

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Chapter: 8
Conclusion

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In this report we have discussed about Dekkos internal and external

sources of finance. Here we have mentioned about Dekkos extended
project and also discussed about their different external parties.
Dekko is committed to diversity in a working environment where there is
mutual trust and respect and where everyone feels responsible for the
performance and reputation of their company. They are committed to safe
and healthy working conditions for all employees.
Dekko is providing suitable products and services which consistently offer
value in terms of price and quality, and which are safe for their intended
use. Products and services will be accurately and properly labeled,
advertised and communicated. Dekko is establishing mutually beneficial
relations with their suppliers, customers and business partners. Dekko is
making

continuous

improvements

in

the

management

of

our

environmental impact and to the longer-term goal of developing a

sustainable business.

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