Extracted data from Penguin plc's last accounts are as follows: A major supplier to Penguin offers a
Question:
A major supplier to Penguin offers a discount of 2 per cent on all future supplies if payment is made on the seventh day following delivery rather than the present 70th day. Monthly purchases from this supplier amount to a regular £0.8m.
Penguin pays 15 per cent annual percentage rate on its overdraft.
Required
Consider what Penguin should do with respect to this supplier.
Annual sales Profits before interest and tax Interest Shareholder funds Long-term debt 0.5 Stocks Trade creditors Bank overdraft
Step by Step Answer:
365 115 1 0000382983 Interest over ...View the full answer
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Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
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