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Compute the permanent financing requirement

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A firm that is in the process of preparing its financial plan for the upcoming year has estimated the following current assets (in P000,000) for the year.

Month

CA

Month

CA

Month

CA

Jan

19.2

May 

36.6

Sept

26.9

Feb

21.6

June

43.8

Oct

25.5

Mar

24.5

Jul

40.5

Nov

23.4

Apr

33.4

Aug

34.4

Dec

20.7

The firm's fixed assets should remain constant at P40 million. Owner's equity is forecast to be P25 million. Working capital policy requires that 50% of maximum current assets financed be with permanent financing.

  1. How much will the firm's permanent level of assets be for the coming year? 
  2. Compute the permanent financing requirement of the firm.
  3. Compute the maximum temporary financing requirement of the firm.

Reference no: EM133067923

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