fn2640_week4_lab1

Assignment 01:

Financial Ratios—Operating and Cash Conversion Cycle Choose a company from Fortune 500 article available through this link http://money.cnn.com/magazines/fortune/fortune500/?iid=H_BN_QL Using the financial data of the selected company, provide the following ratios: Inventory Period, Accounts Receivable Period, and Average Payment Period. Discuss the meaning of these ratios and their relevance compared to industry standards. Submission Requirements: Have you provided the calculations for each ratio, as required? Have you analyzed the results from the calculations and compared them to industry standards? Provide references in APA format.

Assignment 02:

Short-Term Financing Use the information below for this assignment. Comfin Company has estimates on its level of current and total assets for the next two years: Year 201X Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Total Assets $500, 000 $475, 000 $460, 000 $470, 000 $475, 000 $485, 000 $495, 000 $555, 000 $600, 000 $650, 000 $700, 000 $750, 000 Current Assets $250, 000 $220, 000 $199, 900 $204, 698 $204, 392 $208, 980 $213, 459 $262, 829 $307, 085 $351, 227 $395, 251 $439, 156 Year 201X + 1 Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Total Assets $600, 000 $570, 000 $552, 000 $564, 000 $570, 000 $582, 000 $594, 000 $660, 000 $720, 000 $780, 000 $840, 000 $900, 000 Current Assets $350, 000 $350, 000 $352, 100 $359, 302 $365, 608 $373, 020 $380, 541 $397, 171 $412, 915 $428, 773 $444, 749 $460, 844 a. Estimate the levels of permanent and temporary current assets for Comfin over these months. Find the average amount for fixed assets, permanent current assets, and temporary current assets in the year 201X and year 201X + 1. b. What average amounts of short-term and long-term financing should Comfin have during each year if it wants to follow a maturity-matching financing strategy over time? c. What average amounts of short-term and long-term financing should Comfin have during each year if it wants to follow an aggressive financing strategy over time? d. Suppose Comfin’s cost of short-term funds is 8 percent and its cost of long-term funds is 15 percent. Use your answers in (b) and (c) to compute the cost of each strategy. e. What are the pro and con arguments toward each strategy in terms of profitability, risk, and company liquidity? Submission Requirements: Answer each problem in detail with a conclusion and results. Submit your answer in a Microsoft Excel file, showing step-by-step solutions to all calculations.

Assignment 03:

CDLater’s projected sales for the first four months of 201X are: January $60,000 February $55,000 March $65,000 April $70,000 The firm expects to collect 10 percent of sales in cash, 60 percent in one month, and 25 percent in two months with 5 percent in uncollectible bad debts. Sales for the previous November and December were $55,000 and $80,000, respectively. The firm buys raw materials 30 days prior to expected sales; that is, the materials for January are bought by the beginning of December with payment made by the end of December. Materials cost are 58 percent of sales. Wages for the months of January, February, and March are expected to be $6,000 per month. Other monthly expenses amount to $5,000 a month and are paid in the second month of the succeeding quarter. The taxes due for the prior quarter were $9,000. The firm plans to buy a new car in January for $18,000. An old vehicle will be sold for a net amount of $2,000. A note of $10,000 will be due for payment in February. A quarterly loan installment payment of $7,500 is due in March. The beginning cash balance in January is $8,000. The company policy is to maintain a minimum cash balance of $5,000. It has an outstanding loan balance of $10,000 in December. Should the firm need to borrow to meet expected monthly shortfalls, the interest cost is 1.5 percent per month and is paid each month on the total amount of borrowed funds outstanding at the end of the previous month.Prepare a monthly cash budget for January, February, and March using the given details. PLEASE USE ATTACHED FILE TO COMPLETE WORK.. Thank you!

EXCEL SHEET FOR ASSIGNMENT 3