Report on liquidity and financing, Financial Management

Extent of Financing Required

It is clear that sales are unsure with low, high and medium estimates of demand. This of itself gives a few uncertainty but the reliability and probability of these estimates will need to be established by appropriate market research. If sales are inferior than expected then any bank finance will take longer to repay thus increasing the amount of finance needed and the proportion of longer-term finance.

Pretentious that just-in-time inventory management is not implemented then the maximum finance requirement is $155640.

Subsequent to July 2003 the expected net cash inflow will be constant (ignoring any further purchases of fixed assets) as follows

543_Report on Liquidity and financing.png

Therefore to pay off a loan of $155,054 it would mean payments over 32 months (155054/4839) would have to take place excluding interest charges. Any difference in these estimates would however affect the amount of the financing needed.

Additionally to uncertain trading results affecting the amount of future financing there is an additional requirement to finance future capital investment as the business expands. This is probable to be a major financing need in the future depending on the rate of expansion.

The levels of the taxation, drawings and interest charges will as well extend the amount of finance needed as these items were not included in the cash budget presented.

Posted Date: 7/12/2013 1:43:19 AM | Location : United States







Related Discussions:- Report on liquidity and financing, Assignment Help, Ask Question on Report on liquidity and financing, Get Answer, Expert's Help, Report on liquidity and financing Discussions

Write discussion on Report on liquidity and financing
Your posts are moderated
Related Questions
Yield Yield represents the actual return on the investments. Different types of yield are discussed below: Coupon Yield: The fixed interest rate on a government security or

Duration is good measure while estimating the percentage price change for a small change in interest rates but the estimation becomes inferior with the larger cha


Under this approach of Valuation, all cash flows are discounted using single interest rate (discount rate).  For example: Consider the 5-year (7.00 percent) Treas

Ask question #Minimum 100 words acceptedaqs #

Break-Even Point The measure of products or services organizations must sell for its revenue from sales to equal its cost of production for the same number of units. Hence, se

Q. Show the Supposition of MM Hypothesis? Supposition of MM Hypothesis:- (i) There are ideal capital markets. (ii) Investors act rationally. (iii) Information regardin

After the calculation of cash flow yield and the average life of the asset-backed and mortgage-backed security based on default, prepayment and recovery ass

Using the operation cycle and any other financial management knowlegde, discuss the applicability of such cycle to poultry business in uganda( consider broilers)

Suppose you are planning to make regular contributions in equal payments to an investment fund for your retirement. Which formula would you use to figure out how much your investme