Share
Explore BrainMass

Working Capital Management

Discussion: Managing Working Capital

The managing director of Sparkrite Ltd, a trading business, has just received summary sets of financial statements for last year and this year. He shows you the following information: Sparkrite Ltd: Income statements for years ended 30 September last year and this year and statements of financial position as of 30 September las

Corporate Financial Management: Working Capital Policy

Can you help discuss what considerations are needed for developing a working capital policy for a company that has low cash, or insufficient cash on hand during low weeks and is at risk of defaulting? - Discuss what a working capital policy is and what should be done with accounts receivable - Discuss how it will reduce future

Venture Capital - Conversion Order

All CP Investors have 20% carry interest. Assume that Series D, E and F investors all have committed $100M investment capital. - Series A: $2M for 10M shares (EBV) - Series B: $11M for 10M shares (Talltree) - Series C: $10M for 10M shares (Owl) - Series D: $15M for 10M shares (2X liq pref) (Series D investors) - Series E: $

Venture Capital - Qualitative Reasoning

Consider the following three companies: - Gasco owns and operates a chain of gas stations in the northeast US. - Fuelco is a pre-revenue company that is attempting to develop new fuel-cell technology to replace the internal combustion engine. - Combco combines the operations of Gasco and Fuelco. Use qualitative reasoning t

Discussing Working Capital

Hi, I need some assistance generating ideas for an essay I am doing on the importance and challenges of minimizing working capital. I am having some trouble generating good ideas to get started.

Capital Purchase

1. Describes capital item and how purchase (new digital mammogram machine) supports management goals, organizational goals, and or meets a specific need. 2. Who are the primary stakeholders and how will view/support this purchase? 3. What are the risks of pursuing or not pursuing this project? 4. Explains the effect of the pu

Working Capital Prior and After Obtaining Loan

If a firm borrowed money on a six month bank loan, the firm's working capital immediately after obtaining the loan, relative to its working capital just prior to the loan, would be: a) Higher b) Lower c) The same d) Would depend on the amount borrowed

Non-Spontaneous External Capital

Assume that an average firm in the office supply business has a 6 percent after-tax profit margin, a 40 percent debt/assets ratio, a total assets turnover of 2 times, and a dividend payout ratio of 40 percent. Is it true that if such a firm is to have any sales growth (g>0), it will be forced either to borrow or to sell common

Cost of Capital and Debt

In a world that is not perfect but risk neutral assume that the firm has projects worth $100 in down state and $500 in the up-state. The cost of capital for projects is 25%. However, if you could finance it with 50-50 debt, the cash flow rights alone are enough to make the cost of capital lower than 20%. Managers are intransigen

Capital planning strategies

Universal Parts Company is considering a bond issue instead of using its credit line to fund projects A and B. The following information was considered in deciding to change the source of capital: -The new union bargaining agreement and increases in the cost of inputs will cause an increase in working capital needs. -UPC's c

Cost of Capital and Purchase Decision

Alpha Corporation is considering buying Beta Corporation for $2,400,000 cash. Beta Corporation has a $600,000 tax loss carryforward that could be used immediately by Alpha Corporation. Alpha Corporation pays tax at the rate of 35%. Beta Corporation will provide $300,000 per year in cash flow (in after tax income plus depreciatio

Capital Mortgage Insurance Corporation

Dear OTA, I am asking for your assistance again with a case study. I hope you can assist. I need 2 or 3 pages answering the following questions to complete my assignment. THANK YOU (Sorry same doc attached 2x's ) 1. Analyzed and explained what CMI and CTS bring to the negotiation table. 2. Analyzed and describe

Calculating Total Paid-In Capital

Sharp Corporation has 150,000 shares of $10 par common stock authorized. The following transactions took place during 2013, the first year of the corporation's existence: Sold 15,000 shares of common stock for $15 per share Issued 10,000 shares of common stock in exchange for legal services valued at $160,000 At the end of

Considering profitability and working capital

Are you only interested in profitability and working capital for financial ratios? If not, what other ones should be reviewed? If you agree, how do these two items give you a complete financial picture? Our main consideration when conducting a supplier evaluation will be the supplier's current financial condition. This has

Risks and advantages of use of leverage

The cost of capital is in constant change due to changes in the level of debt and risk. However, the use of financial leverage (increasing debt as percentage of equity) can have some advantages for the firm, couldn't it?

Management: Purchasing Capital Items

In a situation of purchasing a capital item for a health facility, define and explain management roles and risks in compliance issues related to the purchase and the use of item?

Working capital DQ

How do business managers determine that acquiring a given working capital asset would help their company financially? What type of working capital asset is time-consuming to manage and why? Explain, if a current ratio <1, does it help management identify a financial problem?

Working Capital and Expenses

Macs Ltd was founded in 1980 sales growth has been reinforced over the past 7 years, by the growing demand from home computer users for a quality paper to print colour photographs and reproductions. The firm has kept up with manufacturing and marketing requirements. However, its financial management system has remained as it w

Working Capital Challenges

Thank you for assisting me in the past. I do need your assistance again. Can you help? How would you answer each questions stated below: A). Health care organizations strive to manage working capital in such a way that they can reliably cover their short-term expenses while also getting the best possible benefits from

three categories of benefits for capital investment

A capital investment is expected to achieve long-term benefits for the organization. These benefits generally fall into three categories. Identify and discuss these categories. Is there one category that seems to be more important than the others? Are they independent or interdependent?

A Company's Cost of Capital

Please need help formulating a complete and thorough response to the following questions: 1. Why is the cost of capital such a vital input when determining a company's capital structure? 2. How does this affect their decision making process? 3. How is the cost of capital derived? For the 1st question, it is my