Xcdffgfffgfffff Essay

586 WordsMar 12, 20153 Pages
EXERCICE 1: creation of a new activity What do you need to create a new activity? Fixed Assets (machines, brands, licences….) & Net Working Capital How will you finance it? Equity or Bank Loans EXERCICE 2: calculate the cash position & estimate its evolution |Fixed Assets 10 000 |Equity 12 000 | |Inventory 5 000 |Bank Loans 1 000 | |Trade debtors 8 000 |Trade creditors 4 000 | Annual Sales: 100 000 Annual Purchases: 20 000 1- What is the cash position of the company? Why? Total Assets: 23 000; Total Liability: 17 000 Cash = 23 000 – 17000 = 6 000 (overdraft) Or: Working Capital: (Equity + Bank Loans)- (Fixed Assets) (12000 + 1 000) – 10 000 = 3 000 Net Working Capital: (Inventory +Trade Debtors) – Trade Creditors (5000 + 8 000) – 4 000 = 9 000 Cash position: WC – NWC 3000 – 9000 = - 6000 2- Express the Net Working Capital in %age of sales & number of days? NWC = (9000/100 000)*100 =9% = (9000/100 000)*360 =32,40 days 3- Propose solutions to improve the cash situation in the future. As the NWC is not very important, the cash position is due a lack of permanent resources; as the company is very low endebted, we can propose a bank loan for a better financial structure. 4- Sales are supposed to increase up 40% next year; the operating conditions are not supposed to change; in this situation what will be the cash position next year? Estimated NWC = 9000*1, 40 =12 600 3000 – 12600 = -8400 5- Conclude. The evolution of the

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