# D payables turnover goes from 6 times to 11 times e

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d) Payables turnover goes from 6 times to 11 times e) Receivables turnover goes from 7 times to 9 times f) Payments to suppliers are accelerated 4) Relevant information of Horizon Ltd is furnished below Sales - Rs 800 million; COGS Rs 720 million Calculate the Operating cycle & Cash conversion cycle for the company
Corporate Finance 2 (2018) Suresh Herur 5) Max Ltd sells goods on Gross profit margin of 25% counting depreciation as part of cost of manufacture. Relevant information from P & L account & Balance sheet for the year indicate the following : Sales are on 2 months credit; Purchases are on 3 months credit; Wages are 1 month in arrears; Other cash mfg exp 1 month arrears. The company maintains 2 months stock of RM ; 1 months stock of FG; and cash balance of Rs 5 million. Estimate the requirement of Working capital on cash cost basis , assuming a 10% safety margin. 6) Suppose that a firm has an investment of Rs 50 crores in assets, Rs 20 crores invested in fixed assets and Rs 30 crores in current assets. It is expected that the assets will yield a return of 18% before interest & taxes. Tax rate is assumed at 35%. The firm maintains a debt ratio of 60%. (ie Rs 20 cr equity invested in total assets) The firm has to decide whether it should use a 12 % short term debt or 14 % long term debt to finance its current assets. Examine & suggest the best alternative from the following Conservative strategy (80% LT Debt) Moderate strategy ( 50% each in ST & LT debts) Aggressive strategy (100% ST Loan ) 7) Table below gives the data from the budget of Ritewell Publishers. Half the company’s sales are for cash & the balance are paid with one month delay. The company pays for its credit purchases with a one month

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• Fall '19
• Debt, Ford Motor Company, Suresh Herur

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