The Finance Director aims to reduce the debtors collection period. She believes that $60$ days

is the optimal point for the debtor collection period. The only issue is that this would result

in a $10\%$ reduction in revenue. Other items such as the cost of sales, trade creditors and

inventory are forecasted to fall by the same percentage.

iv$.$ If the average debtors collection period is successfully reduced to $60$ days $h$ year

$2022,$ determine the expected working capital requirement.

$(6$ marks$)$

v$.$ A member of the team suggests the company pursue an IPO to raise further finance.

Consider the drawbacks of such a strategy.

$(8$ marks$)$