Finance

Income statement	Current year	Last year
Revenue	2,500.00	2,350.0
COGS	-1,560.0	-1,490.0
Gross profit	940.0	860.0
SG&A	-410.0	-385.0
Add back depreciation	100.0	94.0
Reverse expectation	-55.0	25.0
EBITDA	575.0	594.0
Deduct deprecation	-100.0	-94.0
EBIT	475.0	500.0
Add back expectational	55.0	-25.0
Opening profit	530.0	475.0
Interest	-110.0	-95.0
Pre- tax profit	420.0	380.0
Tax	-84.0	-76.0
Profit for the year (Net profit)	336.2	304.0

Balance statement	Current year	Last year
Cash	125.0	117.5
Receivable	310.0	290.0
Investment	200.0	190.0
Other current assets	20.8	19.6
Total current assets	655.8	617.1
Property, plant, and equipment	1,975.0	1,840.0
Intangible assets	19.2	17.9
Total non-current assets	1,994.2	1,857.9
Total assets	2,650.0	2,475.0
Payables	85.0	80.0
Short-term debt	75.0	60.0
Current portion of long-term debt	45.0	55.0
Other current liabilities	174.0	16.0
Total current liabilities	222.0	211.0
long-term debt	615.0	600.0
Total non-current liabilities	615.0	600.0
Total liabilities	837.0	811.0
Total equity	1,813.0	1,664.0
Total liabilities and equity	2,650.0	2,475.0
Net operating working capital	425.0	400.0
Leverage (Net debtEBITDA)	1.06x	1.01x
Coverage (EBITinterest)	4.32x	5.26x
Liquidity (quick ratio)	2.05x	2.02x
Assest turn	0.94x	2.02x
Cash Flow Statement extracts
Profit for the year (Net profit)	336.0
Add back depreciation	100.0
Charge in working capital	-25.0
Cash flow from operating	411.0
Funds from operation (FFO)	436.0
Capital expenditure	-235.0
Dividend paid	-187.0

1. 
   
   1. Hormuz trading Ltd has a covenant in an existing debt facility that restricts restricts EBIT/Interest expense to more than 4.0x. Given that constraint, and assuming the firm could borrow new money for 78.00%, what is the maximum additional debt the firm could borrow, based on the current year's EBIT and interest expense?
2. 109.4
3. 118.8
4. 421.9
5. 1,484.4
6. 
   
   1. Hormuz trading Ltd’s wants to borrow to fund the purchases of a similar business based in the Kingdom of Saudi Arabia. What is the most appropriate bank product to use for this specific purpose?
7. Amortizing term loan.
8. Revolving credit.
9. Seasonal loan.
10. Trade finance.
11. When considering Hormuz trading Ltd’s new borrowing request, it is most likely to require a fixed charge over which of the following?
    1. High-end appliances inventory.
    2. Loan to the small suppliers.
    3. Showrooms and head office premises.
    4. Unassembled kitchen units inventory.
12. What happened to Hormuz trading Ltd’s leverage and liquidity in the current year compared to last year?
13. Leverage improved, and liquidity weakened.
14. Leverage improved, and liquidity improved.
15. Leverage weakened, and liquidity weakened.
16. Leverage weakened, and liquidity improved.
17. What was Hormuz trading Ltd ‘s credit-free cash flow for the current year?
18. -86.0
19. -11.0
20. 14.0
21. 249.0

Answer rating: 100% (QA)

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