AaBbCc AaBbCcD AaBbCcDd AaBbCcDd AaBbC AaBbCcC AaBb x A A Heading 3 Heading 7 1 Normal 1 No Spac... Heading 1 Heading 2 Headr nt Paragraph Styles Section 2: Working Capital Management Firms set policies on (investments, financing, inventory, payables and accounts receivable) to manage the cash available in the operations. The objective is to always have cash on hand to meet its obligations ina manner that is acceptable to all its stakeholders. With reference to the accounts for FastFix Auto Parts Ltd (FastFix), carry out some basic calculations (listed below) and comment on the changes in these ratios as to their affect on working capital. Then specifically list some actions that management could take to improve the cash situation. Fastfix Auto Parts Ltd Income Statement: for the period ending 31 December 2011 2012 Sales 7,035,600 5,800,000 612,960 120,000 6,532,960 502,640 6,034,400 COGS Other expenses Depreciation Total operational costs EBIT Interest expense 4,980,000 720,000 116,960 5,816,960 217,440 176,000 41,440 80,000 422,640 EBT ew Zealand D Focus Paragraph Styles Taxes (40%) 16,576 169,056 Net Income 24,864 253,584 Fastfix Autoparts Ltd Balance Sheet: As at 31 December 2011 2012 14,000 71,632 878,000 1.716.480 2,680,112 836,840 7,282 20,000 632,160 1,287,360 1,946,802 939,790 Cash Short-term investments Accounts Receivable Inventories Total Current Assets Net Fixed Assets Total Assets 2,886,592 3,516,952 324,000 720,000 359,800 300,000 Accts. payable Notes payable 380,000 1,039,800 500,000 1,680,936 296,216 1,977.152 284,960 1,328,960 1,000,000 Accruals Total Current Liabilities Long-term debt Common stock Retained earnings Total equity Total Liabilities & Equity 460,000 97,632 557,632 3,516,952 2,886,592 Other data 2012 2011 Insert Update Table Caption Cross-reference tyie APA U odate Index Smart Researcher Insert Mark CitationLL Bibliography Lookup Entry Citation Citations & Bibliography Research Captions index Table of Authoriti Other data 2011 2012 Stock price $6.00 $12.17 250,000 $1.01 No. of shares 100,000 $0.25 $0.11 EPS DPS $0.22 $7.91 Book val. per share Lease payments $5.58 40,000 40% 40,000 40% Tax rate Required Calculations a) Calculate the percentages changes from 2011 to 2012 for all 33 lines in the accounts listed above (use the Excel file provided). b) Calculate the following for both 2011 and 2012 i) Working capital i) Current ratio iii) Debt to total assets ratio iv) Times interest earned 41 ge Foc land 4 Page v) Inventory turnover vi) Days sales in inventory vii) Accounts receivable turnover viii) Average collection period ix) Payables deferral period x) Cash conversion cycle c) Although net income has increased significantly in 2012 list and discuss three improvements and actions that management could take to make the working capital situation even better in 2013? (Your ratio calculations and percentage changes guide this answer) D Focus and)