CREDIT RISK MANAGEMENT

QUESTION AND ANSWER

Question 3 [20 Marks]

As a credit analyst for a provincial development finance institute, Mmusi Trailer Manufacturing Inc. approaches your institution for a bridging finance.

The following financial information is provided: o current assets of R13 million o current liabilities of R7 million o net sales of R32 million o quick ratio of 1.00 o debtors collection period of 30 days

Calculate the level of inventory and receivables. (20 Marks)

*Please take ALL your time in researching the question, answer very accurately and in detail.*