Question
Anuj Cotton Mills currently facing some financial crunches relating to its working capital and it finances its current assets from long term sources. Therefore, the
Anuj Cotton Mills currently facing some financial crunches relating to its working capital and it finances its current assets from long term sources. Therefore, the CEO of the company appoints you to examine the situation and suggest for the necessary remedies. As a financial analyst, you must answer the following questions. i) Which ratios are more prevalent for examining the working capital condition of the firm? ii) As the firm uses its long-term funds to finances the current assets then what will happen to solvency position of the firm? iii) Prepare a trend analysis for the revenue, net profit and gross profit of the firm for last three years. iv) Do the Horizontal and vertical analysis for the above company. v) Give your final suggestion relating to the above working capital problem. Note: Use some illustrative numbers for the necessary financial information relating to balance sheet, income statement, and other financial items. You dont have to prepare entire Balance Sheet or Income Statement and only consider the items which are relevant for the above problem. Show your solution and arguments for the above questions along with the numerical. Provide an additional excel file for your calculation
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