Explore BrainMass

Working Capital Management

Working Capital Strategies

What ethical implications arise as a result of an organization employing various working capital strategies to realize long-term opportunities.

Working Capital for Pula Paper

Pula Paper Ltd is a manufacturer of facial tissues. The company needs to borrow $1,000,000 to help finance seasonal inventory build-up prior to the Lunar New Year. The company is considering the following alternatives for financing its working capital. Option A: The company may issue $1,000,000 in 180-day maturity commercial

Property transaction: Section 1231 and recapture provisions

Yoshida owns two parcels of business land (Section 1231 assets). One parcel can be sold at a loss of $30K, and the other parcel can be sold at a gain of $40K. Yoshida has no norecaptured Section 1231 losses from prior years. The parcels could be sold at any time because potential purchasers are abundant. Yoshida has a $25K s

Working Capital

How do we "manage" the levels of working capital required in a business?

Best Mix of Capital

ACME Corp is a publicly traded firm listed on the NASDAQ. Its current common stock price is 10 dollars per share. The company currently has 75 million dollars in sales. It expects sales to grow at 3 percent a year for the next several years. The company's current fixed costs are 50 million dollars. The federal tax rate is 4

Stock/Capital Gain/Percentage Return

One year ago, Mr. Seth Cohen invested 10.400 dollars in 200 shares of First Industries Inc. stock and just received a dividend of 600$. Today he sold the 200 shares at 54.25$ per share. a. What was his capital gain? b. What was his total dollar return? c. What was his percentage return? d. What was the stocks dividend

Importance of Working Capital Management

Explain why working capital management has become increasingly important in the current business environment. Provide at least two examples of organizations that have good working capital management policies, and two examples of organizations with poor working capital management policies. Be sure to explain why the policies of y

Sources of Capital; Present Value Concept

For each of the following situations, the present value concept should be applied; 1. Your wealthy aunt has just established a trust fund for you that will accumulate to a total of $100,000 in 12 years. Interest on the trust fund is compounded annually at an 8% interest rate. How much is your trust fund today? 2. On Ja

Working Capital Management

(1). Indicate by a (+), (-), or (0) whether each of the following events would probably cause accounts receivable, sales, and profits to increase, decrease, or be affected in an indeterminate manner A/R Sales Profits The firm tightens its

Working Capital Management, Credit and Policies

1. Why is some trade credit called free while other credit is called costly? If a firm buys on terms on 2/10,net 30, pays at the end of the 30th day, and typically shows $300,000 of accounts payable on its balance sheet, would the entire $300,000 be free credit? Would it be costly credit, or would some be free and some costly?.

Journalize stock transactions, post, and prepare paid in capital - Hayslett Corp.

Hayslett Corp was organized on Jan. 1,2006. It is authorized to issue 20,000 shares of 6%m $50 par value preferred stock, and 500,000 shares of no par common stock with a stated value of $2 per share. The following stock transactions were completed during the first year. jan 10-issued 100,000 shares of common stock for cash a

Current Asset Management - Mountain Home Systems

Mountain Home Systems, Inc. is a well-known and reputable supplier of integrated circuits to manufacturers of telecommunications devices. The firm is currently debating whether to expand its sales to car-telephone manufacturers. While the firm expects an extra $2 million in sales if it enters this market, it also knows that 15

What will be the total return if the available capital is reduced by 2 units?

Please help with the following problem. Eight units of capital can be invested in three activities with the return from each activity given in the accompanying table. Determine the capital allocation to each activity that will maximize the total return. What will be the total return if the available capital is reduced by 2

Capital Investment Analysis

24-1 The following data are accumulated by Environmental Services Inc. in evaluating two competring capital investment proposals: Testing Equip Centrifuge Amount of investment $42,000 $56,000 Useful life 4 years 5 years Estimated residual value -0- -0- Estimated tota

Contributed Capital Problems

Problem 1 Valenti Corporation had 5,000 shares of $100 par value, 9 percent cumulative preferred stock and 30,000 shares of $10 par value common stock outstanding during each of its first four years of operation. The following amounts of cash dividends were paid during the years indicated: 20x1, $0; 20x2, $80,000; 20x3, $220,

Venture Capital

Pickwick Electronics is a new high-tech company financed entirely by 1 million ordinary shares, all of which are owned by George Pickwick. The firm needs to raise $1 million now for stage 1 and, assuming all goes well, a further $1 million at the end of 5 years for stage 2. First Cookham Venture Partners is considering two p

Debt as Attractive Source of Capital

Why is debt an attractive source of capital? What risks does a company incur when it uses debt to fund growth? Why will a company that uses 10% debt have less variability in EPS at different levels of income than a company that uses 25% debt? At what cost of debt will there be no difference in EPS at a given level of income?

Current ratios, working capital, retained earnings, stock

For each of the following numbered items, you are to select the lettered item(s) that indicate(s) its effect(s) on the corporation's statements. If more than one effect is applicable to a particular item, be sure to indicate ALL applicable letters. (Assume that the state statutes do not permit declaration of non liquidating divi

The XYZ company is experiencing a growth rate of 25% per year.

#4 The XYZ company is experiencing a growth rate of 25% per year. As a result of this rapid growth there has been a need to increase working capital. This increase in working capital has traditionally not been managed and has been financed by a short term line of credit at the local bank. The bank has now indicated that they are

Negative Net Working Capital

Is it possible for an organization to operate with negative net working capital? Why or why not? Would a company with high profit margins be more likely to adopt an aggressive or a conservative working capital policy? Why? Is it possible for an organization to be profitable and run out of cash? How?

Optimal Working Conditions

Scenario: The Home Company had been a family owned call-center business for many years. Recently, it had grown so large that it had become impossible for the family structure to handle the 2000 employees that were scattered across the country. A Fortune 200 Company had acquired it and it now has a new Board of Directors. Yo

Working Capital Management Case Study -Xtreme Toys

Xtreme Toys® is a small manufacturing company in Southern California. Management is concerned because as their sales have grown, their cash flow has shrunk. Management doesn't understand how this could happen and has approached your team to find a solution for this dilemma. 1) Part A: Calculate the following: a)

Working Capital Management

1. For retailer, what are the major costs and benefits of holding inventory? what different benefits and costs apply to raw materials inventory held by manufacturer? 2. What is safety stock? Explain how it is possible that safety stock might be negative?

Working Capital Management

A) Dan plans to use the preceding ratios as the starting point for discussions with SKI's operating executives. He wants everyone to think about the pros and cons of changing each type of current asset and how changes would interact to affect profits and EVA. Based on the data in the table, does SKI seem to be following a relax