Reference no: EM133120459
ABC Co. has P5 million in inventory and P2 million in accounts receivable. Its average daily sales are P250,000. The company has P1.5 million in accounts payable. Its average daily purchases are P50,000. What is the length of the company's inventory conversion period?
A firm needs a total P30 million in new cash for transaction purposes. The annual interest rate on marketable securities is 12% and the brokerage fee cost per transaction of selling securities to replenish cash is P1,000. Which of the following is closest to the firm's optimal average cash balance?
ABC Co. has a total annual cash requirement of P9,030,000 which are to be paid uniformly. ABC has the opportunity to invest the money at 21% per annum. The company spends, on the average, P30 for every cash conversion to marketable securities. What is the optimal cash conversion size?
ABC Co. recently reported sales of P100 million, and net income equal to P5 million. The company has P70 million in total assets. Over the next year, the company is forecasting a 25 percent increase in sales. Since the company is at full capacity, its assets must increase in proportion to sales. The company also estimates that if sales increase 20 percent, spontaneous liabilities will increase by P2.1 million. If the company's sales increase, its profit margin will remain at its current level. The company's dividend payout ratio is 45 percent. Based on the AFN formula, how much additional capital must the company raise in order to support the 20 percent increase in sales?
ABC Co. would like to maintain its cash account at a minimum level of P25,000, but expect the standard deviation in net daily cash flows to be P2,000; the effective annual rate on marketable securities to be 7.5% per year, and the trading cost per sale or purchase of marketable securities to be P200 per transaction. What will be their optimal cash return point?
ABC Company's total assets fluctuate between P350,000 and P450,000, while its fixed assets remain constant at P250,000. If the firm follows a maturity matching or moderate working capital financing policy, what is the likely level of its long-term financing?