Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
The number of properties sold every month indicates that Thorne Co experiences seasonal trends in its business. There is an sign that property sales are at a low level in winter and increase as spring approaches. A proportion of any cash excess is consequently likely to be short-term in nature since some cash will be required when sales are at a low level. Even though net cash flow is predict to be positive in the January the month with the lowest level of property sales the negative opening cash balance indicates that there may be months prior to December when sales are even lower.
Short-term cash excesses should be invested with no risk of capital loss. This limitation signifies that appropriate investments include short-dated gilts, treasury bills, public authority bonds and certificates of deposit and bank deposits. When selecting between these instruments Thorne Co will consider the length of time the surplus is available for the size of the surplus (some instruments have minimum investment levels), the risk associated with each instrument, the yield offered and any penalties for early withdrawal. A small company similar to Thorne Co with an annual turnover slightly in excess of $1m per year is likely to find bank deposits the most convenient method for investing short-term cash surpluses.
Since the company seems to generate a cash excess of approximately $250000 per year the company must also consider how to invest this longer-term surplus. As a fresh company Thorne Co is likely to want to invest surplus funds in expanding its business but as a small company it is probable to find a few sources of funds other than bank debt and retained earnings.
There is so a need to guard against capital loss when investing cash that is intended to fund expansion at a later date. As the retail property market is extremely competitive investment opportunities must be selected with care and retained earnings must be invested on a short- to medium-term basis until an appropriate investment opportunity can be found.
Explain and critically evaluate : a) The relevance of committed fixed costs in deciding the optimal mix of products to maximum a company's profit and the importance of relevant
Walk-through tests - Auditor • "Walk-through tests" -That is tracing one or more transactions by accounting system and observing application of internal controls. Rev
Accounting Principle Accounting principles are the primary assumptions, rules of operation, and necessary features that make up the framework for the construction of accountin
Suggestion Regarding Credit Limit Should It Be Approved Or Not What Should Be The Ammount Of Credit Limit That Electronics Give To Booth Plastics
State the several goals for the organisation As there could be several goals for the organisation, we must try and summarise theorganisational goals in financial terms so that
Q. Describe about Permanent Working Capital? Permanent Working Capital: - The requirement for working capital fluctuates from time to time. Nevertheless to carry on day-to-day
Define and discuss indirect world systematic risk. The indirect world systematic risk can be illustrated as the covariance among a nontradable asset and the world market portfo
Describe the value maximisation criterion In applying the value maximisation criterion, term value is used in terms of worth to the owners, which is, ordinary shareholders. Cap
Performance budget: it involves evaluation of the performance of the organization in the context of both overall and specific objectives of the organization. As per the National I
Reference Index Every FRN chooses its own reference index upon which the calculation of each successive new coupon is based. The most commonly used reference index is LIBOR. It
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd