Corporate Finance Math Problem

Undergraduate
Math Problem
Miscellaneous
Pages 8 (2008 words)
Download 0
Ans 1): After comparing the financial records of both years, we observe that the expansion didn't come up with a positive result because the company envisaged a big loss after it enjoyed profit a year before.
On the contrary, profit & loss account of Computron's company showed a net loss of $(95136) FY 2007 as compared to a net profit a year before of $87960, merely because of the increase in cost of good sold, which were $2864000 in the year 2006, which increased by $2.11 million or 73%, which suppressed the company to declare a net loss in the year 2007.

Introduction

Liabilities on the other side also increased due to the expansion, while the equity deteriorated little bit in the year 2007 by 0.106 million because of the net loss of the company.
Ans-2): Cash flow statement shows that the account receivable head of the company was increased with a rapid pace in the year 2007, which showed that the company was involved in credit sales. Cash flow statement also showed that the company spent $0.711 million to acquire the fixed assets during expansion of their network.
The cash flow available to be distributed among the shareholders after the company has made all the investment in working capital and fixed assets to enhance the ongoing operation is called free cash flow (FCF).
Ans-4): The assets which are used in the operation of the business like inventory, long term operation assets and plant & Equipment are known as operating current assets. By contrast, the fund which comes from the suppliers and reported as account payable, accrued wages and accrued taxes are referred to as operating current liabilities.
Since both the ...
Download paper
Not exactly what you need?

Related papers

Corporate finance
In tradeoff theory, the search is for an optimum capital structure. The tradeoff is between the interest tax shield, bankruptcy costs and agency costs. The firm would seek the optimum debt ratio that maximises the value of the firm. It therefore balances the marginal present values of interest tax shields against bankruptcy costs and agency costs. The theory therefore predicts the mean reversion…
International Corporate Finance
A comparative analysis of the pros and cons of doing business in both of the countries has also been provided, along with recommendations on the market that the Flying Wombat should target. An appendix is present for easy reference and a bibliography is also present at the end of the report.…
corporate finance
For banks, on the other hand, it was a bitter-sweet experience. Before the euro, they easily handled 15 different west European currencies and interest rates, and made good money out f trading cash, securities and derivatives for customers and for their own book. On January 1st 1999, when 11 currencies were irrevocably fixed against each other (the 12th, the Greek drachma, joined the euro two…
Corporate Problem Solving
Can anything be done about the wide variety and large amount of information that comes to many corporate planners on a daily basis' Most corporate planners get so much information that they can hardly manage their workloads. Yet, to make the business a success, they must make effective and throughough decisions, using up-to-date information (Hansen, 1995). As John Naisbitt pointed out on the first…
Assignment 3 High School Math Problem
The intersections of the revenue and cost lines represent also the value where there is no profit or loss. In addition, it can be seen that costs and average costs intersect at some point. This can be determined with the following solution:…
Corporate Finance Math Problem
Liabilities on the other side also increased due to the expansion, while the equity deteriorated little bit in the year 2007 by 0.106 million because of the net loss of the company.…
CORPORATE FINANCE
It had been generally assumed that there is an optimal mixture of debt and equity in a firm's capital structure that results in a shallow, U-shaped average cost-of-capital curve. That is to say, the market value of the firm will rise to a point with an increase in the debt ratio. Beyond that point, any increase in the debt ratio will cause the market value of the firm to decline. (Ariff and Lau,…