Question 23 (a) and (b) is based on the following Balance Sheet: Current assets Current liabilities Cash 1000 8000 Accounts payable Overdraft 10 000 Accounts receivable ? Inventory 9000 Non-current liabilities Non-current assets Loan 5 000 5 000 Equipment Vehicle 10 000 Total equity Capital 8 000 (a) Calculate the current ratio (current assets + current liabilities) for this business. Show all working. (b) Recommend a cash flow management strategy for this business.
Question 23 (a) and (b) is based on the following Balance Sheet: Current assets Current liabilities Cash 1000 8000 Accounts payable Overdraft 10 000 Accounts receivable ? Inventory 9000 Non-current liabilities Non-current assets Loan 5 000 5 000 Equipment Vehicle 10 000 Total equity Capital 8 000 (a) Calculate the current ratio (current assets + current liabilities) for this business. Show all working. (b) Recommend a cash flow management strategy for this business.
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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Transcribed Image Text:Question 23 (a) and (b) is based on the following Balance Sheet:
2$
$
Current assets
Current liabilities
Accounts payable
Overdraft
Cash
1000
10 000
Accounts receivable
8000
?
Inventory
9000
Non-current liabilities
Non-current assets
Loan
5 000
5 000
Equipment
Vehicle
Total equity
Capital
10 000
8 000
(a) Calculate the current ratio (current assets ÷ current liabilities) for this business. Show all
working.
(b) Recommend a cash flow management strategy for this business.
Transcribed Image Text:(c) Compare the risks involved in domestic and global financial transactions.
Expert Solution
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Financial analysis is the method through which the financial data and information of a corporation are analyzed and examined in order to determine the financial performance of the corporation. Financial analysis helps in knowing the financial position of the corporation.
Financial ratios are the measures and metrics that are used in financial analysis for the purpose of analyzing the financial performance and position of the corporation. Financial ratios measure the liquidity, solvency, profitability, and financial position of a corporation.
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