Question
Currently, ABS Company has an issues with the working capital. ABS is running the food manufacturing. The firm only has RM20,000 cash in the bank
Currently, ABS Company has an issues with the working capital. ABS is running the food manufacturing. The firm only has RM20,000 cash in the bank and the critical problem faced with its account receivable. Its day sales outstanding is 55 days compared to industry 25 days.
Its turnover ratio is only 5 times compared to the industry 12%. Currently, the firm do not invest in capital market or money market.
Required:
As a finance manager in the company, you are required to determine the problem may arise in the company and to overcome the issues. Assess your above findings and present to your CFO.
Step by Step Solution
3.44 Rating (163 Votes )
There are 3 Steps involved in it
Step: 1
According to the information given ABS Corporation is dealing with the following issues Lack of working capital The business only has RM20000 in the b...
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Entrepreneurial Finance
Authors: J. Chris Leach, Ronald W. Melicher
6th edition
1305968352, 978-1337635653, 978-1305968356
