Probability of success in application for debt finance, Financial Accounting

Assignment Help:

Q. Probability of Success in Application for Debt Finance?

I have to advise you that there are signs of overtrading in our recent financial statements and our company is approaching its overdraft limit of $1·25 million. We will need to obtain further long-term finance regardless of whether our application for a $3·2 million bank loan is successful.

I note that no additional equity investment is available from the current directors. It may be in our greatest interests to address our overall long-term financing needs rather than seeking finance only for the proposed investment in Product FT7 manufacture.

Our overall long-term financing require is greater than $3·2 million. It is my opinion base on our recent financial performance our current financial position and the effect of such a large amount of debt on our capital structure that an application for a $3·2 million bank loan would not be successful and that alternative sources of finance should be sought. I would be pleased to recommendation on these if the Board requested.


Related Discussions:- Probability of success in application for debt finance

Explain destruction of a portion of capital stock of nation, According to t...

According to the Solow model, how would each of the following affect consumption per worker in the long run (i.e. in the steady state)? Draw a figure and explain. a. The destruc

Explain your findings and conclusion, When the stock market is going up ove...

When the stock market is going up over a long period of time, investors can become complacent about the risks of being a stockholder. After the significant decline of the stock mar

Shorter discounting periods, Occasionally cash flows may have to be discoun...

Occasionally cash flows may have to be discounted more often than once a year semi- monthly, daily, annually or quarterly.  The outcome of this is as fold (i)  The number of per

Create a trial balance and income statement, Create a Trial Balance and Inc...

Create a Trial Balance and Income Statement Cash                                     $18,470    A/R                                         14,333                            A

First meeting of creditors-public examination, First Meeting of creditors ...

First Meeting of creditors The Official Receiver must convene this meeting within 60 days of the receiving order, unless the court extends the time, by giving notice to each c

Adjudication order-adjudication of debtor, Adjudication order The court...

Adjudication order The court may adjudge the debtor bankrupt on the application of the O.R. or any creditor in the following cases: If the creditors so resolve at their first

Describe accounting concept of a business combination, Describe the account...

Describe the accounting concept of a business combination. Business Combination: According to International Financial Reporting Standard-3 Business Combinations "A busi

What is the interest receivable and interest revenue, Journalize the entrie...

Journalize the entries to record the receipt of the amounts due on Notes (5) and (6) in January. Date Face Amount Term Interest Rate 5. Nov. 15 $54,000 60days 6% 6. Dec. 27 $40,500

Financial and managerial accounting, You have been hired as consultants to ...

You have been hired as consultants to advise Mr D of DN Company limited on the performance of his company which has been  in business for two years. He has provided you with a subs

Describe the usiness entities:, Answer all of the parts in this task. Part ...

Answer all of the parts in this task. Part (i) is worth a maximum of 6 Marks - 1 Mark each part. Parts (ii) and (iii) are worth a maximum of 2 Marks each. (i) Describe each of t

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd