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hello, im having some difficulties with this question. can you help me please. b) The current assets and current liabilities of ABCD Co at the
hello, im having some difficulties with this question. can you help me please.
b) The current assets and current liabilities of ABCD Co at the end of March 2014 are as follows: For the year to end of March 2014, ABCD Co had domestic and foreign sales of $40 million, all on credit, while cost of sales was $26 million. Trade payables related to both domestic and foreign suppliers. For the year to end of March 2015, ABCD Co has forecast that credit sales will remain at $40 million while cost of sales will fall to 60% of sales. The company expects current assets to consist of inventory and trade receivables, and current liabilities to consist of trade payables and the company's overdraft. ABCD Co also plans to achieve the following target working capital ratio values for the year to the end of March 2015: Inventory days: 60 days Trade receivables: 75 days Trade payables: 5 days Current Ratio: 14 days Critically explain the internal methods which could be used by ABCD Co to manage foreign currency transaction risk arising from its continuing business activities. (14 marks) Step by Step Solution
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