Fresh Fish Imports Ltd is planning for 2023 and wants to estimate the funds they will...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Fresh Fish Imports Ltd is planning for 2023 and wants to estimate the funds they will require. The company has total assets of R1 600 million, total liabilities of R900 million, sales of R125 million with a net profit margin of 15% and a dividend pay-out ratio of 50%. The company expects sales of R250 million in the 2022 financial year and will pay a special dividend totalling R10 million in 2023. All assets and liabilities are considered spontaneous and increase in line with sales. Assets are currently utilised to their full capacity. Estimate the company's need for funding for 2023. Question Chips Ltd. is currently planning their cash requirements for the next quarter of their financial year, January 2023 to March 2023. The company sells electronic supplies on credit, leading to a constant flow of sales and payments from debtors, with occasional large inflows when goods are supplied for large contracts. The aging report on the accounting system of the company gives the following breakdown of collection from debtors: 40% one month after the sales have taken place 60% two months after the sales have taken place The sales recorded for both November 2022 and December 2022 were R500 000 respectively. Sales are expected to increase to R600 000 in January 2023 and to remain at this level until at least March 2023. Further to this, e-mails from other branches and sales personnel indicate that the company can expect payments from large contracts worth R100 000 in January, R80 000 in February and R200 000 in March (all in 2023). Variable costs related to sales equal 80% of the selling price; and the company has fixed expenses estimated at R300 000 every month. The company had a cash balance of R200 000 at the end of December 2022. The company uses a R20 000 000 revolving credit facility to finance cash shortfalls which costs 1% per month and on which interest is paid on the closing balance of the previous month. Required: Compile a cash budget for Chips Ltd. for January to March 2023. Fresh Fish Imports Ltd is planning for 2023 and wants to estimate the funds they will require. The company has total assets of R1 600 million, total liabilities of R900 million, sales of R125 million with a net profit margin of 15% and a dividend pay-out ratio of 50%. The company expects sales of R250 million in the 2022 financial year and will pay a special dividend totalling R10 million in 2023. All assets and liabilities are considered spontaneous and increase in line with sales. Assets are currently utilised to their full capacity. Estimate the company's need for funding for 2023. Question Chips Ltd. is currently planning their cash requirements for the next quarter of their financial year, January 2023 to March 2023. The company sells electronic supplies on credit, leading to a constant flow of sales and payments from debtors, with occasional large inflows when goods are supplied for large contracts. The aging report on the accounting system of the company gives the following breakdown of collection from debtors: 40% one month after the sales have taken place 60% two months after the sales have taken place The sales recorded for both November 2022 and December 2022 were R500 000 respectively. Sales are expected to increase to R600 000 in January 2023 and to remain at this level until at least March 2023. Further to this, e-mails from other branches and sales personnel indicate that the company can expect payments from large contracts worth R100 000 in January, R80 000 in February and R200 000 in March (all in 2023). Variable costs related to sales equal 80% of the selling price; and the company has fixed expenses estimated at R300 000 every month. The company had a cash balance of R200 000 at the end of December 2022. The company uses a R20 000 000 revolving credit facility to finance cash shortfalls which costs 1% per month and on which interest is paid on the closing balance of the previous month. Required: Compile a cash budget for Chips Ltd. for January to March 2023.
Expert Answer:
Answer rating: 100% (QA)
To compile a cash budget for Chips Ltd for January to March 2023 we need to calculate the cash inflows and outflows for each month Heres the breakdown ... View the full answer
Related Book For
Contemporary Financial Management
ISBN: 9780324289114
10th Edition
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
Posted Date:
Students also viewed these accounting questions
-
The Wilson Diversified Company has total assets of $130,000 at the end of 2007 and the following condensed income statement for 2007: Sales ............. $90,000 Operating expenses ...... (66,600)...
-
The Sooner Equipment Company has total assets of $100 million. Of this total, $40 million was financed with common equity and $60 million with debt (both long- and short-term). Its average accounts...
-
The Buffalo Manufacturing Company has total assets of $10 million, an asset turnover of 2.0 times, and a net profit margin of 15%. a. What is Buffalos return on assets? b. Find Buffalos ROE, given...
-
Inverse permutation. Write a program that reads in a permutation of the integers 0 to n-1 from n command-line arguments and prints the inverse permutation. (If the permutation is in an array a[], its...
-
The Atlantic Grocery chain operates in major metropolitan areas on the eastern seaboard. The stores have a no-frills approach, with low overhead and high volume. They generally buy their stock in...
-
A company that uses job order costing purchases $ 5 8 , 0 0 0 in raw materials for cash. It then uses $ 1 9 , 0 0 0 of raw materials as indirect materials and uses $ 3 0 , 6 0 0 of raw materials as...
-
Consider a 10-year zero-coupon bond with face value \(\$ 100\). The interest rate is fixed at 5\%. The credit spread for the bond is estimated to be \(1 \%\) (except in part (a)). Calculate: (a) The...
-
How is the cost of ending inventory calculated in a process costing system?
-
According to a theory of economics, government revenue can be given by the function x(x-100)(x-160) f(x)= 240 , 0 x 100, where f(x) is government revenue (in billions of dollars) from a tax rate of x...
-
Identifytwo (2) additional needs or barriers to participation related to each of the five areas stated; Behavioural or psychological disorders Child at risk of harm Family circumstances and needs,...
-
A default constructor has how many parameters? Select one: O a. 2 1.00 O b.0 O c. Variable number O d.1 n
-
A sorority has 35 members, 25 of whom are full members and 10 of whom are pledges. Two persons are selected at random from the membership list of the sorority. Find the requested probabilities. a....
-
What are the required properties of molding sands? Classify the molding sand.
-
What are the various types of patterns? Explain them with their uses.
-
Explain the application of various hand tools used in casting with neat sketch.
-
Interview at least three people from different stages of the life cycle to determine if they own one or more of the following: life insurance, health insurance, dental or eye care insurance, dread...
-
Imagine you are the manager of a company tasked with selecting a vendor to purchase an Enterprise Resource Planning (ERP) system. Write a 200-word essay discussing the steps you would take to secure...
-
[a] Two foam blocks, each with a charge of 19 micro coulombs (1 C = 10-6 C), are both held in place 19 cm apart in the east-west direction. A foam ball with a charge 49 C is placed 55 cm north of the...
-
A firm has an opportunity to invest in a new device that will replace two of the firms older machines. The new device costs $570,000 and requires an additional outlay of $30,000 to cover installation...
-
Using Equation, suppose you have computed the required rate of return for the stock of Bulldog Trucking to be 16.6 percent. Given the current stock price, the current dividend rate, and analysts...
-
The Emco Steel Company has experienced a slow (3 percent per year) but steady increase in earnings per share. The firm has consistently paid out an average of 75 percent of each years earnings as...
-
Bethany, who weighs 560 N, lies in a hammock suspended by ropes tied to two trees. One rope makes an angle of 45 with the ground; the other makes an angle of 30. Find the tension in each of the ropes.
-
In the Skycoaster amusement park ride, riders are suspended from a tower by a long cable. A second cable then lifts them until they reach the starting position indicated in Figure P5.3. The lifting...
-
A dump truck, whose bed is made of steel, holds an old steel watering trough. The bed of the truck is slowly raised until the trough begins to slide. What is the acceleration of the trough as it...
Study smarter with the SolutionInn App