Question
The following statements relates to Shida LTD for the period ended 30thSeptember, 2011. Statement of Financial Position for year ending 30thSeptember, 2011 Non-current Assets shs000
The following statements relates to Shida LTD for the period ended 30thSeptember, 2011.
Statement of Financial Position for year ending 30thSeptember, 2011
Non-current Assets shs‘000’ shs‘000’
Land 1000
Plant 5,000
Equipment 8,000 14,000
Current Assets
Inventories/stock 4,000
Accounts receivable/debtors 3,000
Cash 400 7400
Total assets 21,400
Capital and liabilities
Preference share capital 1,000
Ordinary share capital 1,000
Paid in capital in excess 2,000
Retained earnings 1,400 5,400
Non-Current liabilities
Mortgage 4,000
Debentures 6,000 10,000
Current liabilities
Accounts payable 5,000
Notes payable 1,000 6,000
21,400
Income Statement ‘shs000’
Sales 6,000
Cost of sales (3,500)
Selling and administration expenses (1,000)
EBIT 1,500
Interest (1,100)
EBT 400
Tax 30% 120
PAT/EAT 280
Required
a)Predict the company’s failure using Altman's Z-Score and interpret its meaning
(b)Explain FIVE options in dealing with financial distress in the corporate sector
Step by Step Solution
3.37 Rating (156 Votes )
There are 3 Steps involved in it
Step: 1
Solution Shida LTD financial statement for period ended 30th September 2011 is given and with the he...
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
Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
10th edition
978-0077511388, 78034779, 9780077511340, 77511387, 9780078034770, 77511344, 978-0077861759
