Case 3. ABC Pvt. Ltd. is a retail company specializing in electronics. They have provided the following data for analysis: • Current Assets: *20,00,000 • Current Liabilities: *10,00,000 • Inventory Turnover Ratio: 6 times • Receivables Turnover Ratio: 8 times • Payables Turnover Ratio: 4 times Questions: 2/4 1. Explain the concept of the working capital cycle. How does it impact a company's cash flow? 2. How does inventory management affect working capital? Discuss techniques that companies can use to optimize their inventory levels. 3. Calculate the working capital cycle for ABC Pvt. Ltd. 4. Interpret the working capital cycle and its implications for the company's liquidity and efficiency. Case 4.

Case 3. ABC Pvt. Ltd. is a retail company specializing in electronics. They have provided the following data for analysis: • Current Assets: 20,00,000 • Current Liabilities: 10,00,000 • Inventory Turnover Ratio: 6 times • Receivables Turnover Ratio: 8 times • Payables Turnover Ratio: 4 times Questions: 2/4 1. Explain the concept of the working capital cycle. How does it impact a company's cash flow? 2. How does inventory management affect working capital? Discuss techniques that companies can use to optimize their inventory levels. 3. Calculate the working capital cycle for ABC Pvt. Ltd. 4. Interpret the working capital cycle and its implications for the company's liquidity and efficiency. Case 4.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

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Analyse and comment on the impact of the following events on a companies balance sheet, income statement and cash flow statement. E. g. Company purchases Machinery for $100,000 in cash. Effect. Obvious impact Fixed Asset increased, Balance sheet affected. Company will start recording depreciation expense in Income Statement Cash Outfi ow will reduce balance of cash on balance sheet. Current Ratio likely affected adversely and Working Capital. Analysis. Company may experience increase in Accounts Payable because of such a substantial cash outflow. This will affect Current Liabilities. Or. Company may have to seek short term loan from the bank as a back up in case there is any disturbance in receivables in the future. To counter this substantial cash outflow. Company should have negotiated with a bank a low interest loan to purchase machine over time in instalments. 1)A Manufacturing company ABC: relies on several suppliers for raw materials, often these materials are purchased on 90…
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1. Calculate the following values for the company for the year ending in 20x9. Present evidence of all your calculations.a. NOPAT - Net Operating Profit after Taxesb. OCF - Operating Cash Flowc. FCF - Free Cash Flow2. Discuss what meaning each of the measures calculated in the previous question has, both for management and for investors and creditors, among other constituents.3. What is the main cause of the differences that exist between the company's earnings and the cash flows of the same evaluated period?
What is the Total Asset Turnover Ratio for a company with $120,000 in annual sales, beginning Assets of $250,000 and ending Assets of $200,000? .48 1.34 .26 .53 please give the correct answswer but only one is right.e xplain the correct naswer The efficiency ratio that shows how efficiently a company uses its cash to generate revenue is: Accounts Receivable Turnover Ratio. Total Asset Receivable Turnover Ratio. Cash Turnover Ratio. Inventory Turnover Ratio. please give the correct answswer but only one is right.e xplain the correct naswer
A. What is the total change in Net Working Capital given the following: $10 million $20 million $5 million $10 million $15 million Decrease in accounts receivable: Decrease in inventory: Increase in prepaid expenses: Increase in other current liabilities: Decrease in accounts payable: B. Describe and provide specific examples of how financial ratios / metrics can be used to support specific business decisions such as financing, credit granting and strategic growth. C. Briefly explain the concept of Free Cash Flow and articulate how it can be employed by corporate managers.
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26. All of the following represent cash outflows to the firm excepta.Taxes.b.Interest payments.c.Dividends.d.Purchase of plant and equipment.e.Depreciation 27. Other things held constant, if a firm holds cash balances in excess of their optimal level in a noninterest-bearing account, this will tend to lower the firm'sa.Operating profit margin.b.Total asset turnover.c.Return on equity.d.All of the above.e.Answers b and c above. 28. Other things held constant, which of the following will not affect the current ratio, assuming aninitial current ratio greater than 1.0?a.Fixed assets are sold for cash.b.Long-term debt is issued to pay off current liabilities.c.Accounts receivable are collected.d.Cash is used to pay off accounts payable.e.A bank loan is obtained, and the proceeds are credited to the firm's checking account.
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