1. What are the major changes that were made by RBI in the Fifth Bi-monthly Monetary Policy statement for 2018-19? 2. You are required to suggest XYZ Ltd. as to which Credit Policy it should adopt. The company has a present annual sales level of 10,000 units at Rs 300 per unit. The Variable cost is Rs 200 per unit and the Fixed costs amount to Rs 3,00,000 per annum. Presently the company allows 1 month credit period which it intends to increase to 2 months and 3 months. The estimates made are as follows: Credit Policy Existing Proposed 1 Month 2 Month 3 … [Read more...]

1. The annual figures of Alpha Ltd are as follows: (i) Sales at home, at 1 month credit Rs. 12,00,000. (ii) Export at 3 months credit, S.P. 10% below the home price Rs. 5,40,000. (iii) Materials used, suppliers extend 2 months credit Rs. 4,50,000. (iv) Wages paid, half month in arreas Rs. 3,60,000. (v) Manufacturing expenses, paid one month in arreas Rs. 5,40,000. (vi) Depreciation on fixed assets Rs. 60,000. (vii) Administrative expenses, paid one month in arrear Rs. 1,20,000. (viii) Sales promotion expenses, payable quarterly in advance Rs. 60,000. Alpha Ltd. sells goods in the … [Read more...]

1. As a Finance Manager describe the various factors that you would take into consideration before assessing the working capital requirements. 2. The Average Monthly Usage of a particular item in Reliable Industries Limited in the current year is expected to be 3000 units. The fixed cost per order is Rs. 1500/-. The purchase price is Rs. 2400 per box, containing a dozen units in each box. It, however, is not necessary to order for the full box of 12 units. The inventory carrying cost is 25% of the inventory value per annum. The quantity discount allowed per unit is 2%. What will be the … [Read more...]

1. Collect the Financial Statements of any two firms from the same industry for 2014-2015 and calculate their Efficiency, Liquidity and Structural Ratios. Based on these ratios give your views on the working capital management of these firms. 2. The Ratan Corporation sells goods earning a gross profit of 25% on sales. You are required to prepare a Statement showing the Working Capital requirement of the company adding 10% margin for contingencies from the annual figures given below : Rs Sales 3,00,000 Materials used 1,08,000 Wages 96,000 Manufacturing … [Read more...]

1. Distinguish the different working capital financing strategies. Under the present capital and money market conditions which of these would you recommend to a consumer durable manufacturing firm. Explain with reasons & list out your assumption, if any. 2. You are required to recommend as to which of the policies given below should be adopted by a trader who wants to pursue a more liberal credit policy to improve sales. His current sales are Rs. 15 lacs per annum & average collection period is 30 days. Credit Policy Increase in Collection Period Increase in … [Read more...]

1. a) Explain the concepts of Working Capital. Discuss the various factors that affect the requirement of Working Capital of a business entity. b) Explain the distinguishing features of matching, conservative and aggressive strategies for financing working capital with the help of illustrations. Under which circumstances each of these are suitable? 2. Why do firms hold cash and marketable securities? Discuss the critical variables of Cash flow forecasting and the different forecasting approaches of cash flow 3. Explain the features of different forms of bank credit prevailing in … [Read more...]

1. Explain the Walker’s and Trade off approaches to working capital investment. 2. Discuss the motives for holding cash. Explain the Baumol Model and Miller and Orr Model. 3. What are advances? Explain the modes of creating charge over assets. 4. What are the commercial paper? Discuss the existing guidelines issued by RBI to regulate issuance of commercial papers. 5. What are the different forms of trade credit? Discuss the various determinants of trade credit. … [Read more...]