Report on liquidity and financing, Financial Management

Assignment Help:

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.


Related Discussions:- Report on liquidity and financing

Short-term volatility position, (a) The position of an agency that sells a ...

(a) The position of an agency that sells a callable coupon bond. We supposed that coupon bond has a maturity of 3 years and is callable only at the second year. (b) The market t

Capital budgeting, Serene Hall ?? Assignment As a consequence of the high l...

Serene Hall ?? Assignment As a consequence of the high levels of stress being recorded in the UK, and a general shift towards a healthier more relaxed lifestyle, as an essential in

The oasis report, The Oasis Report Amidst all these problems, the Minis...

The Oasis Report Amidst all these problems, the Ministry of Social Justice and Empowerment constituted a committee with a view to improve old-age social security in the country

Illustrate about foreign exchange earnings, Q. Illustrate about foreign exc...

Q. Illustrate about foreign exchange earnings? In theory foreign exchange earnings must not be hedged as the chances of an adverse movement are equivalent to those of a favoura

INTEREST, Mr. X invests Rs. 10000 at 10% p.a compounded semi-annually. Comp...

Mr. X invests Rs. 10000 at 10% p.a compounded semi-annually. Compute value after three years.

Explain the structure of financial systems, Explain the structure of financ...

Explain the structure of financial systems In direct finance borrower-spenders borrow funds straight from lenders in the financial markets by selling them securities. In indire

Excess of the inadequate of the working capital, Every business concern sho...

Every business concern should have neigh adequate capital to run the business operations it should have neither redundant nor excess working capital non inadequate or Shortage of

Use npv method to show your calculations, Xcell engineering is planning to ...

Xcell engineering is planning to construct a futsal stadium which has 5 courts to be rented out at any point of time. Its initial cost of investment is RM$280,000. It is expected t

Functional silo, It is a phrase referring to the tendency of departments to...

It is a phrase referring to the tendency of departments to become isolated from one another in a functionally structured company.

Show the advantages of irr method, Q. Show the Advantages of IRR Method? ...

Q. Show the Advantages of IRR Method? Advantages of IRR Method:- (i) Similar to the other DCF methods IRR methods as well take into consideration the time value of money.

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