Identify and explain one of the sources of finance ( finance leasing, hire purchase, overdraft, and accounts payable) of Nestle Malaysia Berhad and discuss advantages and disadvantages of each source of finance from the company's point

of view. Answer must according to the annual report of Nestle Malaysia

Berhad.

The capital structure and sources of finance of the company as at 31 December 2019 can be given as follows :

Sources of Finance Amount (RM'000)

Shareholders fund

Share capital 2,67,500

Reserves 3,97,424

Shareholders fund 6,64,924

Non current liabilities

Long term Lease liabilities 1,76,823

Employee benefits 91,444

Deferred tax liabilities 1,38,597

Total non-current liabilities 4,06,864

Current liabilities

Short term Loans and borrowings 2,57,431

Short term Lease liabilities 28,753

Trade and other payable 13,21,407

Current tax liabilities 47,159

Total current liabilities 16,54,750

The sources of short term borrowings are given below :

Sources of Finance Amount (RM'000)

Bank overdraft - unsecured 42,827

Loan from a related company - unsecured 1,14,604

Revolving credit - unsecured 1,00,000