Currently, ABS Company has an issues with the working capital. ABS is running the food manufacturing. The firm only has RM20,000 cash in the bank and the critical problem faced with its account receivable. Its day sales outstanding is 55 days compared to industry 25 days. Its turnover ratio is only 5 times compared to the industry 12%. Currently, the firm do not invest in capital market or money market. Required: As a finance manager in the company, you are required to determine the problem may arise in the company and to overcome the issues. Assess your above findings and present to your CFO.

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
Problem 1PS
icon
Related questions
Question
FINC2110/Sept/Oct2021
Page 4 of 5
Currently, ABS Company has an issues with the working capital. ABS is running the food
manufacturing. The firm only has RM20,000 cash in the bank and the critical problem faced
with its account receivable. Its day sales outstanding is 55 days compared to industry 25 days.
Its turnover ratio is only 5 times compared to the industry 12%. Currently, the firm do not
invest in capital market or money market.
Required:
As a finance manager in the company, you are required to determine the problem may arise in
СFO.
your
the
company
and to overcome the issues. Assess your above findings and present to
Transcribed Image Text:FINC2110/Sept/Oct2021 Page 4 of 5 Currently, ABS Company has an issues with the working capital. ABS is running the food manufacturing. The firm only has RM20,000 cash in the bank and the critical problem faced with its account receivable. Its day sales outstanding is 55 days compared to industry 25 days. Its turnover ratio is only 5 times compared to the industry 12%. Currently, the firm do not invest in capital market or money market. Required: As a finance manager in the company, you are required to determine the problem may arise in СFO. your the company and to overcome the issues. Assess your above findings and present to
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Classification and Prediction of Corporate Financial Distress
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education