seasonal cycle of Toys World's working capital needs and necessitate new bank credit arrangements. It has to be analyzed the company's performance, forecast fund needs and make a recommendation. The case introduces the pattern of current assets and cash flows in aseasonal company and provide and elementary exercise in the construction of the pro forma financial statements and estimation of fund needs. Toy World has been facing two basic issues, as follows: - The first one is if it has to change
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Situation Analysis First of all I consider your instant closing of old branch as a major setback from the operations point of view. Since last two years you built an amazing rapport there with your customers and established your technical acumen as a brand, you should have atleast provided some overlap plan rather than shifting instantly to the new Arcade so that it could have contributed to your image building at new location and consequently you should shut down this premise once your brand attained
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percent compounded monthly 2800/(1+ 0.049/12)12x3 =2800/1.157993 = 2417.98 5.2 percent compounded quarterly 2800/(1 + 0.052/4)4x3 =2800/1.167652 = 2397.97 5.4 percent compounded annually 2800/(1.054)3 = 2391.31 Present value with multiple cash flows: Saul Cervantes has just purchased some equipment for his landscaping business. He plans to pay the following amounts at the end of the next five years: $9,944, $8,670, $12,320, $8,790, and $13,552. If he uses a discount rate of 5.216 percent
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benefits that the company will incur after this project implementation are as follows: * Inventory reduction (one-time, non-taxable): when you reduce inventory; it is similar to sell off some of inventory for cash, and brings the firm cash inflow. (but it is a one-time event; cash flow will turn to zero when inventory reduces to its target level) * Additional sales units due to product availability- which is ,persistent and taxable * Increased margin. (persistent and taxable) *
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sensitiveness on environment related issues • Punishable offence under law with considerable probability. • Emissions systems- Exhaust systems Recirculating emissions, more expensive, satisfying employee safety and environment regulations • Impact on cash flow (for insolvency), and income statement. Problem Statement Whether AWC Inc. should go for the emissions control
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products. The cash flow forecast predicts that 1996 sales, $28,206, will increase to $33,847 for 1997. For every dollar of this increase, $1056.44 net investment in working capital is needed. This investment is used to support higher sales in 1997. Under this set of assumptions, Tire City has excess cash of $273.31 at the end of 1996 given management decides not to create any decision cash flows. This is very unrealistic that management will not take on any decision cash flows. This
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Installing new modern telecommunication will provide wide range of options. Options include conference call and automated call responses. Installing new electronic cash registers connected to the company network will help keep track of inventory par levels. Electronic cash register will increase productivity and is easy to use. The use of a new cash register will track of inventory allowing accurate ordering of supplies. “AccuBar is a sophisticated
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Introduction: Presented in this evaluation of LJB, I would like to address what internal control regulations this company will need to follow in its plan to go public including standards set forth under the SOX Act, what areas the company has successful internal controls in place, and what departmental processes need more efficient internal controls put in place. By doing so, I think you as president can make LJB a more secure company and avoid many of the risks it is taking leading to fraudulent
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of the supplies and pays for these purchases. He also receives the checks and completes the monthly bank reconciliation. The accountant is so busy that the company handles petty cash a bit differently. All employees have access to the petty cash in a desk drawer and are asked to only place a note if they use any of the cash. The accountant has recently started using pre-numbered invoices and wants to buy an indelible ink machine to print their checks. The president is waiting to hear from you if
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of the supplies and pays for these purchases. He also receives the checks and completes the monthly bank reconciliation. The accountant is so busy that the company handles petty cash a bit differently. All employees have access to the petty cash in a desk drawer and are asked to only place a note if they use any of the cash. The accountant has recently started using pre-numbered invoices and wants to buy an indelible ink machine to print their checks. The president is waiting to hear from you if
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