Reference no: EM132531341
The following is the Balance Sheet of Gallant (Pty) Ltd. (Rand in thousands)
Liabilities Assets
Share Capital - 20 000 Fixed Assets 25 000
Retained Earnings 12 000 Investments 7 000
Long-term Loan 0 Stock 15 000
Trade Creditors 23 000 Debtors and Others 25 000
Overdraft 24 000 Other Debtors 3 000
Accruals and others 1 000 Cash 5 000
Total 80 000 Total 80 000
You have been informed that the bank has extended an overdraft facility of R50million only, of which R24million is currently utilized. No other facility is enjoyed from any other bank.
Question (a) Calculate the following and explain your views:
i) The working capital requirement, from the finance manager's point of view
ii) The working capital, from a lending bank's perspective