Question
Larry and Janice Martin continue with their ambitions. CompuTech would be a repair and sales shop in the Kitchener area. As they prepared their Business
Larry and Janice Martin continue with their ambitions. CompuTech would be a repair and sales shop in the Kitchener area. As they prepared their Business Plan and the related financial projections they knew that there would be many business, operational and financial decisions that they would need to consider. This was to be important not only as they were sketching out their plan but also once the business started operating. To succeed they were reminded that they needed to operate to generate profits, to be able to pay bills and to grow the business through investment and growth. Further they knew that investing decisions at the start and throughout the life of the business, operating decisions on a day to day basis and above all financing decisions as to where and how to use monies from investors to make the greatest returns. MODULE 5: Reflecting upon the Balance Sheet and the Income Statement that you prepared in Module 2 of the Case: Q1: What is the companys expected Current Asset level? What is the companys Net Property & Plant level? Q2: Looking at your Income Statement and Balance Sheet from Module 2 what is the projected CompuTech average outstanding Accounts Receivables? What is the companys Inventory Turnover rate? Q3: If the company wished to exhibit a 30 day receivable average, what would their level of Accounts Receivable become? If they were able to invest the savings at 7% what would their impact on profits be? Q4: If CompuTechs competition is experiencing a 6 X turnover on inventory, is CompuTech matching this performance, and if not what level of inventory should they be displaying?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
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