assiogment, Finance Basics

Assignment Help:
Ask question #MinimQuestion

You are the financial accountant of Donald Bhd, a manufacturer and wholesaler of soft drinks. Donald Bhd is in direct competition with Fizz Bhd and Pop Bhd.

The finance director has informed you that the board of directors are considering purchasing an interest in one of their two competitors in order to increase market share. This decision will be based on forward-looking market and management information. However, the directors seek to use data from recent corporate reports to construct the necessary estimates and forecasts leading to their decision.

The finance director has provided you with the following table of statistics calculated from the most recent financial statements of both competitors.

Fizz Bhd Pop Bhd
Gross profit margin 40% 40%
Net profit margin 15% 10%
Inventories turnover 8 times 4 times
Receivable days 63 days 40 days
Payable days 65 days 65 days
Current ratio 1.25:1 1.75:1
Liquid ratio 0.9:1 1:1
Asset turnover 1.5 times 2 times

Required:

Using the above information, prepare a report for the board of directors’ comparing the results and the financial situation of the two competitors
um 100 words accepted#

Related Discussions:- assiogment

Calculate total number of ordinary shares, Calculate total number of ordina...

Calculate total number of ordinary shares Example Company XYZ Ltd has sold 10,000 ordinary shares of Shs.30 as partly called up plus 20,000 Shs.45 preference shares, tha

Primary markets - financial markets, Primary Markets - Financial Markets ...

Primary Markets - Financial Markets These are markets such deal along with securities that have been issued for the first moment. The money flows directly from transferor or t

Irr or internal rate of return, IRR or Internal Rate of Return This me...

IRR or Internal Rate of Return This method is a discounted cash flow technique that uses the principle of NPV.  It is described as the rate such equates the present value of c

Asset based valuation, Asset Based Valuation  This method acquires int...

Asset Based Valuation  This method acquires into account the entire business along with reference to its assets and then divides the resultant value via the number of shares i

Cash flow statement, how to calculate cash flow? What components are requir...

how to calculate cash flow? What components are required to calculate it ?

Financial and Operational Hedging, There are four different commonly used f...

There are four different commonly used financial hedging techniques and some operational hedging techniques that firms use to manage currency risk. Drawing on literature, critical

Percentage of sales method - financial forecasting, Percentage of Sales Met...

Percentage of Sales Method - Financial Forecasting This method includes expressing various balance sheet items such are directly concerned to sales as a percentage of sales.

Floatation of new shares, Floatation of New Shares Rules for floatati...

Floatation of New Shares Rules for floatation of new shares The company must contain an issued share capital of at least Kshs.20 M. The company must contain c

Define the term public issues - floating new issues, Define the term Public...

Define the term Public Issues - Floating New Issues Under this method, issuing company directly offers to general public/institutions a fixed number of shares

E-Commerce, Ask question #Minimu• 1.What is an Auction? E Bay is a market l...

Ask question #Minimu• 1.What is an Auction? E Bay is a market leader in online auction sites. Discuss SWOT for E bay using your web sources?. 2.Why so many entrepreneurs drawn to

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd