PKA CO

b) COST OF CURRENT ORDERING POLICY COST USING EOQ

ANNUAL PURCHASE COST - APC -

ANNUAL HOLDING COST 30000 AHC 11250
ANNUAL ORDRING COST 1562.5 AOC 6250
CORRENT TOTAL COST 31562.5 TOTAL COST AT EOQ 17500

SAVING AT ORDERING EOQ 14062.5

PKA CO
WORKING:1
EOQ 25000
CURRENT DATA
D 625000
Co 250
Ch 0.5

BUFFER STOCK 10000 ???????

CURRENT ORDER QUANTITY 100000

MINIMUM INVENTORY LEVEL=RE-ORDER LEVEL-(AVG-USAGE*AVG-LEAD TIME)

FLG CO
 HGR CO
WORKING:
MONTH-1 MONTH-2 MONTH-3
CASH INFLOWS O/D INTEREST IS 6.17% P
FOR MONTH-1 SO INTERE
CASH RECIEPTS 4220 4350 3808

CASH OUTFLOWS

CASH PAYEMENTS -3950 -4100 -3750

CAPITAL INVESTEMENTS -2000
INTEREST PAYEMENT -19.53833 -18.25054 -18.0873
INTEREST ON BONDS -200
CASH SURPLUS/DEFICIT 250.4617 31.74946 -1960.087
OPN-BALANCE -3800 -3549.538 -3517.789
CLOSING BALANCE -3549.538 -3517.789 -5477.876
WORKING:

O/D INTEREST IS 6.17% PER YEAR BASED ON OPN-BALANCE THE O/D BALANCE IN BALANCE SHEET WILL BE OPN-BALANCE
FOR MONTH-1 SO INTEREST COST ON O/D IN MONTH-1 WOULD BE

INTEREST COST FOR MONTH-1 19.53833

OPN-BALANCE
 APX CO
b)

INCOME STATEMENT FOR NEXT YEAR SOFP

SALES 17.344 N-C-A
COST OF SALES -12.1408
GROSS PROFIT 5.2032 INVENTORY
OPERATING EXPENSES -1.7344 RECIEAVABLES
OPERATING PROFIT 3.4688
FINANCE COST -0.94 TOTAL ASSETS
PBT 2.5288
TAX -0.75864 EQUITY FINANCE
PAT 1.77016 ORDINARY SHARES
DIVIDEND -0.88508 RESERVES
PROFIT FOR THE YEAR 0.88508
LONG TERM LOAN

PAYABLES
O/D(B/F)

TOTAL LIABILITIES
 WORKING:
22
INVENTORY -3.658871
3.658871
3.088658 RECIEVABLES 3.088658

28.74753 PAYABLES -2.494685

5 RESERVES 8.38508
8.38508

10

2.494685
2.867764

28.74753
 WQZ
a) COST OF CURRENT ORDERING POLICY COST AT EOQ

APC - APC -
AHC 66560 AHC 38400
AOC 4000 AOC 12800
TOTAL COST 70560 TOTAL COST 51200

DECREASE IN COST IF EOQ IS USED 19360

b) RECIEVABLE MANAGEMENT
RECIEVABLE DAYS 75
WHETEHER DISCOUNT SHOULD BE OFFERED OR NOT?

COST OF DISCOUNT 0.219

BENEFITS OF DISCOUNT

DECREASE IN FINANCE COST 0.297

DECRESE IN ADMIN COST 0.753

GAIN/(LOSS) 0.831
 WORKING:

CURRENT POLICY EOQ

D 160000 EOQ 5000

Q 16000
Co 400
Ch 5.12
BUFFER STOCK 5000

WORKING-1: WORKING-2
EXISTING SALES 87.6
SALES AFTER DISCOUNT EXISTING FINANCE COST 0.99
21.681
65.7 NEW FINANCE COST
87.381 0.099
COST OF DISCOUNT 0.219 0.594
0.693
DECREASE IN FINANCE COST 0.297

d 0.25

2%
b) CASH OPERATING CYCLE
RECIEVABLE DAYS 59.97653
INVENTORY DAYS 100.1524
LESS:PAYABLE DAYS 66.76829
93.36067

c) VALUE OF FACTOR WITH RECOURCE BASIS

COST IF FACTOR IS NOT APPPOINTED COST IF FACTOR IS APPOINTED

000 000
BAD DEBTS 191.7 FACTOR FEE 159.75
ADMIN COST 40 INTEREST ON FACTOR ADVANCE 147.0575
INTEREST ON O/D 245 INTEREST ON REMAINING AMOUN28.59452
BAD DEBTS 127.8
ADMIN COST 0
476.7 463.2021
SAVING IF FACTOR IS APPOINTED WITH RECOURCE BASIS -13.4979452054795
 BOLD CO

VALUE OF FACTOR WITH NON-RECOURCE BASIS

1- HERE THERE WOULD BE ONE EXTRA COST SAVINFG OF BAD DEBTS AS

ACTOR IS APPOINTED 2- HERE FACTOR WILL BE RESPONSIBLE FOR BAD DEBTS
BUT HERE FACTOR CHARGES HIGH FEE
COST IF FACTOR IS NOT APPPOINTED COST IF FACTOR IS APPOINTED
000 000
BAD DEBTS 191.7 FACTOR FEE 266.25
ADMIN COST 40 INTEREST ON FACTO 147.0575
INTEREST ON O/D 245 INTEREST ON REMAI 28.59452
BAD DEBTS 0
ADMIN COST 0
476.7 441.9021
SAVING IF FACTOR IS APPOINTED WITHOUT RECOUR-34.79795
OF BAD DEBTS AS

ACTOR IS APPOINTED
 WOBNIG CO
2011 2010

SALE GROWTH 40%

INCRESE IN O/D 500%
CURRENT RATIO 1.22543 1.497615
QUICK RATIO 0.733104 0.918919
INVENTORY DAYS 75.00335 60.02711
RECIEVABLE DAYS 80.41308 61.00337
PAYABLE DAYS 99.99283 89.98569
SALE REVENUE/NET WORKING CAPITAL 14.76118 11.04899
WOBNIG CO
c) GIVEN:
MINIMUM CASH LEVEL 200000
SPREAD 75000

REQUIRED?
UPPER LIMIT?
RETURN POINT?

SOL:

UPPER LIMIT=LOWER LIMIT+SPREAD 275000

RETURN POINT=LOWER +1/3 OF SPREAD 225000

RETURN POINT=UPPER-1/2 OF SPREAD 225000
 KXP CO
WHETHER TO OFFER DISCOUNT OR NOT?

COST OF DISCOUNT(W-1) 75

BENEFITS OF DISCOUNT

1-DECREASE IN FINANCE COST(W-2) 48.09403

2-DECREASE IN ADMIN COST -
3-DECREASE IN BAD DEBTS -
NET LOSS -26.90597

b) COST OF CURRENT ORDERING SYSYTEM COST OF PROPOSED ORDERING SYSTEM(WITH DISCOUNT)

APC 540000 APC 529200

AHC 1800 AHC 3600
AOC 1800 AOC 900
543600 533700

NET BENEFIT OF TAKING DISCOUNT 9900

 WORKING:
RECIEVABLE DAYS 60.006

WORKING:1 W-2:

EXISITING' 15000 EXISTING FINANCE COST 147.96

NEW 7425 NEW FINNACE COST 36.9863
7500 33.28767
14925 29.592
COST OF DISCOUNT 75 99.86597
DECREASE IN FINANCE COST 48.09403

G SYSTEM(WITH DISCOUNT) WORKING:

CURRENT SYSTEM PRPOSED SYSTEM
Q 15000 Q 30000
D 180000
Co 150
Ch 0.24
 TGA CO
CURRENT OPERATING CYCLE OPERATING POLICY AFTER POLICY CHANGES

RECIEVABLE DAYS 89.99954 RECIEVABLE DAYS 62

INVENTORY DAYS 79.99583 INVENTORY DAYS 50
LESS:PAYABLE DAYS 29.99421 LESS:PAYABLE DAYS 45
OPERATING CYCLE 140.0012 OPERATING CYCLE 67

DECREASE IN OPERATING CYCLE 73.00116

CURRENT RATIO BEFORE POLICY CHANGES CURRENT RATIO AFTER POLICY CHANGES

1.199987 1.329698

CURRENT RATIO INCREASED FROM 1.2 TO 1.33

ICY CHANGES

WORKING:
INVENTORY 295.8904
RECIVABLES 917.2603
CURRENT ASSETS 1213.151

PAYABLES 266.3014
O/D(B/F) 646.0493
CURRENT LIBILITIES 912.3507

NET WORKING CAPITAL 300.8

 PLOT CO
a-1) TOTAL COST OF CURRENT ORDERING POLICY TAOTAL COST AT EOQ

APC - APC -
AHC 2250 AHC 3001.25
AOC 3204 AOC 2001.25
5454 5002.499

SAVING SMADE BY USING EOQ 451.5008

b)ACCEPT EARLY SETTLEMENT DISCOUNT OR NOT?

COST IF ACCEPTED COST IF REJECTED

OUTFLOW 451440 OUTFLOW 456000

INTEREST INCOME 1873.973
NET OUTFLOW 454126

SAVING IF DISCOUNT WERE TAKEN 2686.0273972603

OST AT EOQ WORKING:
Q 25000 EOQ 40024.99
D 300000
Co 267
Ch 0.1
BUFFER STOCK 10000
 CSZ
a) WORKING CAPITAL CYCLE OF CSZ CO

INVENTORY DAYS 80.01923

RECIEVABLE DAYS 59.99688
LESS:PAYABLE DAYS 30.00019
110.0159

b) TARGET QUICK RATIO

WORKING:
QUICK RATIO 0.945946
FORECAST CREDIT SALES 40000
FORECAST COST OF SALES 24000

TARGET SALES/NET W-CAPITAL RATIO TARGET INVENTORY 3945.205

TARGET RECIEVABLE 8219.178
TARGET PAYABLES 3616.438
11.50901
CURRENT RATIO=C-A/C-L

CURRENT RATIO 1.4

CURRENT ASSETS 12164.38
CURRENT LIABILITIES CURRENT ASSETS/CURRENT RATIO

O/D 5072.407

WORKING CAPITAL 3475.538

ASSETS/CURRENT RATIO 8688.845
 FLIT CO
a) CASH BALANCE AT THE END OF EACH MONTH

JAN FEB MAR

CASH RECIEPS FROM SALES 960000 1000000 1092000
RAW MATERIAL -500000 -520000 -560000
VARIABLE OH -130000 -140000 -150000
MACHINE PURCHASED -400000
LOAN RECIEPT 300000

NCF 330000 340000 282000 UNITS

OPN CASH BALANCE 40000 370000 710000 COST OFRAW-MATERIAL
CLOSING CASH BALANCE 370000 710000 992000
WORKING:
DECEMBER
SALES 960000

RAW MATERIAL
DEC JAN FEB MAR APR
1200 1250 1300 1400 1500
400 400 400 400 400
500000 520000 560000
WETHER FACTOR SHOULD BE APPOINTED OR NOT?

COST IF FACTOR IS NOT APPOINTED

INTEREST ON O/D 225995.8 INTEREST ON ADVANCE

ADMIN COST 50000 INTEREST ON REMAINING AMOUNT
BAD DEBTS 267500 FACTOR FEE
543495.8 ADMIN COST
BAD DEBTS

SAVING IN COST IF FACTOR IS APPOINTED 90975

WIDNOR CO

COST IF FACTOR IS APPOINTED WORKING:

RECIEVABLE DAYS 60.82879
145638.9
26006.94
200625
-
80250
452520.8
 ZXC CO
a) WETHER DISCOUNT SHOULD BE GIVEN OR NOT?
WORKING:
BENIFIT OF DISCOUNT 4656000
1- CURRENT CREDIT SALES
AFTER DISCOUNT
DECREASE/INCREASE IN FINANCE COST -32354
DECREASE/INCREASE IN ADMIN COST -35000 EXISTING
DECREASE/INCREASE IN BAD DEBTS 12000 NEW
4600646 INCREASE

2- FINANCE COST

EXSISTING
NEW 107460
60894

INCREASE
CREDIT SALES 24000000
28800000

24000000
28656000
-4656000

3-BAD DEBTS COST

136000 EXISTING 120000

NEW 108000
DECREASE 12000
168354
32354
 NESUD CO
a) WETHER TO ACCEPT EARLY SETTLEMENT DISCOUNT OR NOT? b) TAC AT CURRENT ORDER QU

IF ACCEPTED IF REJECTED APC 2400000

AHC 21200
OUTFLOW 1.4925 1.5 AOC 2981.28
INTEREST INCOME 0.005 2424181
1.4925 1.495

SAVING BY USING EOQ

LOSS IF ACCEPTED 0.0025
ADMIN COST -0.0005
0.002
TAC AT CURRENT ORDER QUANTITIY TAC AT EOQ DATA GIVEN:
PPPU 5
APC 2400000 D 480000
AHC 7950.04 Ch 1.06
AOC 7950.04 Co 248.44
2415900 Q 40000

EOQ 15000.08
8281.2
 PANGLI CO
CASH OPERATING CYCLE OF PANGLI CO AT VSTART OF JAN-2007
WORKING:
INVENTORY DAYS 78 SALES FOR JAN-2007 3500000
RECIEVABLE DAYS 42.00171 COST OF SALES 2100000
LESS:PAYABLE DAYS 32.00571
87.996

b) O/D EXPECTED AT THE END OF JAN-2007

 OSCAR CO
a) OPTION-1 FACTOR WITH RE-COURSE BASIS

RECIEVABLE DAYS 70.00179

COST IF FACTOR IS NOT APPOINTED COST IF FACTOR IS APPOINTED

ADMIN COST 30000 FACTOR FEE 140000

BAD DEBTS 560000 ADMIN COST -
FINANCE COST 375900 BAD DEBTS 560000
965900 FINANCE COST 161095.9
861095.9

SAVING IN COST BY USING FACTOR 104804.1

OPTION-2 GIVES THE HIGEST BEN

 a) OPTION-2 FACTOR WITHOUT RE-COURSE BASIS

COST IF FACTOR IS NOT APPOINTED COST IF FACTOR IS APPOINTED

ADMIN COST 30000 FACTOR FEE 420000

BAD DEBTS 560000 ADMIN COST -
FINANCE COST 375900 BAD DEBTS -
965900 INTEREST ON FACTOR ADVANCE 165698.6
INTEREST ON REMAINING AMOUNT 32219.18
617917.8

COST SAVING IF FACTOR IS APPOINTED 347982.2

GIVES THE HIGEST BENEFIT

 DUSTY CO
a)
1-AHC OF CURRENT ORDERING SYSTEM 13125 GIVEN DATA:
D 1500000
2-AOC OF CURRENT OEDERING SYSTEM 3024 PPPU 14
ANNUAL PURCHASE COST 21000000 NO OF ORDERS 12
COST AT CURRENT SYSTEM 21016149 Co 252
Ch 0.21

b) COST AT EOQ EOQ 60000

APC 21000000
AHC 6300
AOC 6300
21012600

COST SAVING BY USING EOQ 3549

c) OFFER OF EARLY SETTLEMENT DISCOUNT

REDUCED PPPU 13.93
APC 20895000 Q 250000
AHC 26250
AOC 1512
20922762

COST SAVING BY USING DISCOUNT 89838

Q 125000

756000000
a1) COST OF CURRENT ORDERING SYSTEM COST IF DISCOUNT IS ACCEPTED

APC 540000 WORKING: APC 531900

AOC 1350 BUFFER INVENTORY 100 AOC 1200
AHC 1620 AHC 2511.75
TAC 542970 HOLDING COST PER UNIT 2.7 TAC 535611.8

COST SAVING IF DISCOUNT IS AVAILED 7358.25

b) EARLY SETTLEMENT DISCOUNT

COST OF DISCOUNT(W-1) -112500 WORKING-1: WORKING:2

CURRENT RECEIVABLE DAYS
BENEFITS OF DISCOUNT

DECREASE IN ADMIN COST 0 EXISTING 45000000

DECREASE IN BAD DEBTS 0 NEW 22387500
DECREASE IN FINANCE COST 96250 22500000
INCREASE IN COST -16250 44887500
112500
NOT FINANCIALLY VIABLE
ISCOUNT IS ACCEPTED

WORKING:
Q 1500
PPPU 29.55
HOLDING COST PER UNIT 2.955
Co 100
BUFFER 100

WORKING:2

EXISTING 297500
NEW 201250
96250
a)-1 FORECAST SOFP PUMICE CO
WORKING:
ASSETS INVENTORY PERIOD
PAYABLE PERIOD
NCA 60017.7 RECIEVABLE PERIOD
FORECAST SALES
CURRENT ASSETS FORECAST COST OF SALES
INVENTORIES 4394.116
RECIEVABLES 15978.6
CASH AND CASH EQUIV 700 FIND INVESTEMENTS FROM THE ABOVE RATIOS

TOTAL ASSETS 81090.42 INVENTORY

PAYABLE
EQUITY AAND LIABILITIES RECIEAVABLE
EQUITY 6000
RESERVES 40818
PROPOSED WORKING CAPITAL
NCL 26000 CURRENT WORKING CAPITAL

PAYABLE 5272.939
O/D 3000

TOTAL EQUITY & LIABILITIES 81090.94

 PUMICCE CO
a-2) EFFECT OF EXPANSION ON WORKING CAPITAL RATIOS

50
60 A) CURRENT TRADE PAYABLE PERIOD 125.935
60 PROPOSED TRADE PAYABLE PERIOD 60
95871.62 REDUCTION IN PERIOD 65.93502
31637.63
B) CURRENT CURRENT RATIO 1.297953
PROPOSED CURRENT RATIO 2.547187
FROM THE ABOVE RATIOS IINCREASE IN CURRENT RATIO 1.249234

4394.116
5272.939 C) CURRENT" REVENUE/W-CAPITAL RATIO" 12.1822
15978.6 PROPOSED "REVENUE/W-CAPITAL RATIO" 6.349206
INCREASE 5.832996

15099.78
6630