FINANCIAL MANAGEMENT (FIN301) QUESTION: Cash Tk. 500,000 Inventories Tk. 250000 Accounts payable Tk. 300,000 Accounts Re
Posted: Fri Mar 04, 2022 9:35 am
FINANCIAL MANAGEMENT (FIN301) QUESTION:
Cash Tk. 500,000
Inventories Tk. 250000
Accounts payable Tk. 300,000
Accounts Receivable Tk. 350,000
Notes Payable Tk. 150,000 (maturity
within a year)
Total Asset Tk. 1000,000
Total Liabilities Tk. 750000
Common Stock Tk. 1000,000
Earnings before interest and tax
(EBIT) Tk. 1500000
Interest payment Tk. 100,000
The company has a good relationship
with one of the leading banks in the country and has a line of
credit facility with them. Currently, the company wants to analyze
its comparative positions with the industry with regard to its
liquidity condition. The industry average of current ratio is
4.0.
a. Calculate
the time interest earn ratio of Spectra Inc.?
b. Calculate
the current ratio of Spectra Inc.?
c. Based
on the information provided, Comment on the company’s liquidity
position.
2. Describe two ways to resolve agency conflict
between shareholder & manager of a company
Cash Tk. 500,000
Inventories Tk. 250000
Accounts payable Tk. 300,000
Accounts Receivable Tk. 350,000
Notes Payable Tk. 150,000 (maturity
within a year)
Total Asset Tk. 1000,000
Total Liabilities Tk. 750000
Common Stock Tk. 1000,000
Earnings before interest and tax
(EBIT) Tk. 1500000
Interest payment Tk. 100,000
The company has a good relationship
with one of the leading banks in the country and has a line of
credit facility with them. Currently, the company wants to analyze
its comparative positions with the industry with regard to its
liquidity condition. The industry average of current ratio is
4.0.
a. Calculate
the time interest earn ratio of Spectra Inc.?
b. Calculate
the current ratio of Spectra Inc.?
c. Based
on the information provided, Comment on the company’s liquidity
position.
2. Describe two ways to resolve agency conflict
between shareholder & manager of a company