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Task 3. Working capital analysis (20 marks) In this task you are also to assume that the figures in the 2017-2019 Income Statement and Balance
Task 3. Working capital analysis (20 marks) In this task you are also to assume that the figures in the 2017-2019 Income Statement and Balance Sheet of the company of your choice are a 3 year prognosis. Discuss the effects of each of the following 6 deviations from the original figures on the operating cash cycle in all 3 years: A. Trade receivables of each of the 3 years are 20% higher than currently forecasted" B. Trade receivables of each of the 3 years are 20% lower than currently "forecasted" C. Trade payables of each of the 3 years are 30% higher than currently "forecasted" D. Trade payables of each of the 3 years are 15% lower than currently forecasted" E. Inventories of each of the 3 years are 40% higher than currently "forecasted" F. Inventories of each of the 3 years are 20% lower than currently forecasted" Based on your analysis provide recommendations to the Board on what the focus of their working capital management should be for each of the six (6) scenarios above
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