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Question 4 [10] The following is the balance sheet of Prestige Textile Distributors. Liabilities Assets Share capital 25 000 Fixed assets 30 000 Retained earnings
Question 4 [10]
The following is the balance sheet of Prestige Textile Distributors. Liabilities
Assets
Share capital
25 000
Fixed assets
30 000
Retained earnings
12 000
Investments
8 000
Long-term loan
17000
Stock
16 000
Trade creditors
22 000
Trade debtors
20 000
Overdraft
0
Other debtors
5 000
Accruals and others
9 000
Cash
6 000
Total
85 000
Total
85 000
1. Discuss working capital requirement. (5)
2. Show the working capital situation if turnover doubles without change in the current terms of trade. (5)
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