Answer iii b)
Modern kitchen has a scope for improving its working capital improvement at each component level
1. Inventory - Modern kitchen can benefit from better inventory management. As its inventory days is much higher than industry average, there is scope for improvement. Company can adopt leaner and lighter model. This will reduce its cost of operations
2. Acc. Receivables & Payable - Modern kitchen need to strike better terms with its Debtors, as industry players are almost 100% more efficient than modern kitchen. With better terms here, and already superior terms with its creditors, firm can almost get to a point where its working capital will be funded by market
Modern Kitchens specializes on sell prefabricated kitchens. The company has stores in all major capital cities througho...
Modern Kitchens specializes on sell prefabricated kitchens. The company has stores in all major capital cities throughout Australia. It’s been established since 2001 and has seen tremendous growth but more recently has seen several overseas competitors enter the Australian market resulting in an increase in competition. This increased competition has placed significant pressure on containing costs and drawn management’s attention to a review of working capital practices. Detailed below are relevant figures and ratios to assist you in evaluating Modern...
Fabulous Fashion Ltd operates a chain of high end ladies’ fashion stores with locations in all major capital cities throughout Australia. It’s been established since 2010 and has seen tremendous growth but more recently has seen several fashion labels from overseas enter the Australian market resulting in an increase in competition. This increased competition has placed significant pressure on containing costs and drawn management’s attention to a review of working capital practices. Detailed below are relevant figures and ratios to...
Fabulous Fashion Ltd operates a chain of high end ladies’ fashion stores with locations in all major capital cities throughout Australia. It’s been established since 2010 and has seen tremendous growth but more recently has seen several fashion labels from overseas enter the Australian market resulting in an increase in competition. This increased competition has placed significant pressure on containing costs and drawn management’s attention to a review of working capital practices. Detailed below are relevant figures and ratios to...
Modern Furniture Ltd competes in the modern furniture retail market alongside Adair’s, Harvey Norman and other major furniture retailers. The market is highly competitive prompting management to review working capital practices. Detailed below are relevant figures and ratios to assist you in evaluating Modern Furniture’s working capital management. Working Capital Ratios 2014 2015 2016 2017 Accounts Receivable Days 30.0 days 38.6 days 44.0 days 51.0 days Inventory Days 30.0 days 34.5 days 37.0 days 46.0 days Accounts Payable Days 29.6...
HORT-TERM FINANCING AND OPTIONS CONTRACT Gregg, the CFO and the board of directors of Baldwin Inc. have taken enough time to discuss capital budgeting, dividend policy, and capital structure and now want to focus their attention on short-term finance and cash planning of the company. The board is considering the ways to improve the working capital management of the company. They are also discussing various sources of short-term financing and the minimum amount of money to borrow in the short-term...
Financial Statement Analysis Modern Building Supply, Inc. Modern Building Supply sells various building materials to retail outlets. Listed below are its financial statements for the past two years. The company, MBS, has just approached State Bank requesting a $300,000 short-term loan for working capital purposes. Would you make the loan? Use the information provided above to help make your decision. Use as many ratios as needed. This Year Last Year $ 90 $ 650 1,160 30 1,930 2,000 3,930 $...
SHORT-TERM FINANCING AND OPTIONS CONTRACT Gregg, the CFO and the board of directors of Baldwin Inc. have taken enough time to discuss capital budgeting, dividend policy, and capital structure and now want to focus their attention on short-term finance and cash planning of the company. The board is considering the ways to improve the working capital management of the company. They are also discussing various sources of short-term financing and the minimum amount of money to borrow in the short-term...
HORT-TERM FINANCING AND OPTIONS CONTRACT Gregg, the CFO and the board of directors of Baldwin Inc. have taken enough time to discuss capital budgeting, dividend policy, and capital structure and now want to focus their attention on short-term finance and cash planning of the company. The board is considering the ways to improve the working capital management of the company. They are also discussing various sources of short-term financing and the minimum amount of money to borrow in the short-term...
HORT-TERM FINANCING AND OPTIONS CONTRACT Gregg, the CFO and the board of directors of Baldwin Inc. have taken enough time to discuss capital budgeting, dividend policy, and capital structure and now want to focus their attention on short-term finance and cash planning of the company. The board is considering the ways to improve the working capital management of the company. They are also discussing various sources of short-term financing and the minimum amount of money to borrow in the short-term...
HORT-TERM FINANCING AND OPTIONS CONTRACT Gregg, the CFO and the board of directors of Baldwin Inc. have taken enough time to discuss capital budgeting, dividend policy, and capital structure and now want to focus their attention on short-term finance and cash planning of the company. The board is considering the ways to improve the working capital management of the company. They are also discussing various sources of short-term financing and the minimum amount of money to borrow in the short-term...