Option 1: PFC management has stated that the new inventory control systems and consolidation of distribution could continue to improve inventory turnover days by 5 days. This improvement could possibly make up the deficiency: • Calculation is as follows: • Working Capital need formula as follows: (These are in thousands from Balance Sheet) • Inventory = (77,358,000 x .75) x (?/360) + Accounts Receivable = (77,358,000 x 74/360) ⚫ - Accounts Payable = (77,358,000 x .75 x .90) x (50/360) (These are now in actual dollars) = $ ? = $ ? =$? = $ ? =$-332,000 (Cash on Hand) Total Working Capital Need = $ ? Line of Credit Calculations . Inv. Advance Rate = (New Inv. from above) x .90 [Finished Goods] x.60 [Bank Advance Rate] =$? • Qualified AR advance = AR from above x .70 Total Collateral Available (-) Working Capital Need (Note: If within $250,000 deficiency, this is sufficient coverage to the Bank's satisfaction) Total Collateral =$? =$? ($151,487) $818.717 ($818,717) O ($77,355)
Option 1: PFC management has stated that the new inventory control systems and consolidation of distribution could continue to improve inventory turnover days by 5 days. This improvement could possibly make up the deficiency: • Calculation is as follows: • Working Capital need formula as follows: (These are in thousands from Balance Sheet) • Inventory = (77,358,000 x .75) x (?/360) + Accounts Receivable = (77,358,000 x 74/360) ⚫ - Accounts Payable = (77,358,000 x .75 x .90) x (50/360) (These are now in actual dollars) = $ ? = $ ? =$? = $ ? =$-332,000 (Cash on Hand) Total Working Capital Need = $ ? Line of Credit Calculations . Inv. Advance Rate = (New Inv. from above) x .90 [Finished Goods] x.60 [Bank Advance Rate] =$? • Qualified AR advance = AR from above x .70 Total Collateral Available (-) Working Capital Need (Note: If within $250,000 deficiency, this is sufficient coverage to the Bank's satisfaction) Total Collateral =$? =$? ($151,487) $818.717 ($818,717) O ($77,355)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no
![Option 1: PFC management has stated that the new inventory control systems and consolidation of distribution
could continue to improve inventory turnover days by 5 days. This improvement could possibly make up the
deficiency:
• Calculation is as follows:
•
Working Capital need formula as follows:
(These are in thousands from Balance Sheet)
• Inventory = (77,358,000 x .75) x (?/360)
+ Accounts Receivable = (77,358,000 x 74/360)
⚫ - Accounts Payable = (77,358,000 x .75 x .90) x (50/360)
(These are now in actual dollars)
= $ ?
= $ ?
=$?
= $ ?
=$-332,000
(Cash on Hand)
Total Working Capital Need
= $ ?
Line of Credit Calculations
.
Inv. Advance Rate = (New Inv. from above) x .90 [Finished Goods]
x.60 [Bank Advance Rate]
=$?
• Qualified AR advance = AR from above x .70
Total Collateral Available (-) Working Capital Need
(Note: If within $250,000 deficiency, this is sufficient coverage to the Bank's satisfaction)
Total Collateral
=$?
=$?
($151,487)
$818.717
($818,717)
O ($77,355)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8c4f3f08-5c4d-48eb-ad26-0a80e7e2ebba%2F5c42d285-3476-4652-b0b1-ceab2a9a6849%2Fid8gpof_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Option 1: PFC management has stated that the new inventory control systems and consolidation of distribution
could continue to improve inventory turnover days by 5 days. This improvement could possibly make up the
deficiency:
• Calculation is as follows:
•
Working Capital need formula as follows:
(These are in thousands from Balance Sheet)
• Inventory = (77,358,000 x .75) x (?/360)
+ Accounts Receivable = (77,358,000 x 74/360)
⚫ - Accounts Payable = (77,358,000 x .75 x .90) x (50/360)
(These are now in actual dollars)
= $ ?
= $ ?
=$?
= $ ?
=$-332,000
(Cash on Hand)
Total Working Capital Need
= $ ?
Line of Credit Calculations
.
Inv. Advance Rate = (New Inv. from above) x .90 [Finished Goods]
x.60 [Bank Advance Rate]
=$?
• Qualified AR advance = AR from above x .70
Total Collateral Available (-) Working Capital Need
(Note: If within $250,000 deficiency, this is sufficient coverage to the Bank's satisfaction)
Total Collateral
=$?
=$?
($151,487)
$818.717
($818,717)
O ($77,355)
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