Determine External Funds Needed (EFN) and how it may be financed.
Q: Explain the Working Capital Management and Sources and Application of Funds.
A: The explanation is provided as follows:
Q: Sources of funds is important because
A: Funding is the fuel for a successful business, the cost of the fund depends on its source.
Q: Why is it important to match your funding with economic life of corresponding asset?
A: The use of assets economic life matching with funding can be an integral tool for financial…
Q: Illustrate some of the Explain with example Financing Activities?
A: Cash Flow statement in general helps understand the reasons for change in cash position of the…
Q: the desired amount of funding from external sources
A: When the amount from internal sources is not sufficient, the firm borrows funds from outside. This…
Q: In your own words, describe ETF’s investment objective, strategy and benchmark. Please include fund…
A: An ETF is a collection of assets whose shares are traded on a stock market. They combine the…
Q: Explain the meaning of asset and liability management through the Pool Fund Approach.
A: Asset/liability management is the technique of controlling the use of assets and cash flows in order…
Q: what is the meaning, purpose and formula of External Financing Need?
A: Finance Finance refers to the provision of money at the time it is required. Every business needs…
Q: Finance is the efficient acquisition, allocation, and utilization of funds. Briefly discuss each…
A: Finance is all about the acquisition of funds in the most optimal manner, then allocating the…
Q: What is the purpose of using the retained funds?
A: After paying the dividends, the company retains the remaining net income which is called addition to…
Q: = sinking fund formula, calculate the
A: Payment per month refers to the amount which a borrower should at the end of each month or period to…
Q: financial management is mainly concerned with obtaining required funds in the appropriate mix and…
A: Financial management refers to the strategic planning, organizing, directing, and controlling of…
Q: mechanism ensure that funds have been properly allocated and spent
A: Proper Allocation of Funds: Proper allocation of fund is very important for the effective and…
Q: Explain the difference between asset allocation funds and lifecycle funds
A: Asset allocation Funds make investments in different asset classes based on the efficient frontier…
Q: What are Sources of Funding?
A: The process that involves determining the fund requirement, identifying and selecting the optimum…
Q: Which of the following will increase the additional funds needed from external sources?
A: EXTERNAL SOURCES OF FUNDS
Q: Define tapping fund assets
A: Fund asset: It can be defined as the value of cash, securities, and other holdings related to a…
Q: What are the uses of funds?
A: The uses of fund are as follows: Purchase of fixed asset: If fixed assets such as plant and…
Q: Differentiate between the Loan and Project Cash Flows?
A: Loan Cash Flows: It refers to the borrowing of unsecured nature that is used by small businesses…
Q: Define additional funds needed (AFN)
A: AFN or additional funds needed is very much important for the organization because it helps them to…
Q: What are funds transfer pricing?
A: Funds transfer pricing (FTP): It is a method used to estimate how financing/funding improves a…
Q: The available capital funds are to be carefully allocated among competing projects by careful…
A: The company should invest the capital funds in such a manner that provides the maximum profit to the…
Q: Define financing activities
A:
Q: Explain the cash conversion cycle, its funding requirements, and the key strategies for managing it.
A: The cash conversion cycle will be reflective of a liquidity metric which will be helpful in…
Q: What is the effective utilization of funds
A: Introduction: While all aspects of money planning are critical, special emphasis is placed on fund…
Q: What is fund capital?
A: Capital Fund: It is the Excess of assets over liabilities for non-profit organizations is termed as…
Q: What is the electronic fund's transfer (EFT) system?
A: Todays generation is introduced to digital payments and any business whether it be large or small…
Q: t are the long-term sources of finance? Give various sources from which the long-term funds can be…
A: Step 1 The financial market, specialized financial institutions, banks, non-bank financial…
Q: How would you recognize the importance of using contingency funds for cost estimation, budgeting and…
A: Contingency funds are additional funds that a company would set aside to meet any cost of potential…
Q: What is funding strategy?
A: Introduction: Strategy usually entails setting targets and objectives, defining steps to meet the…
Q: What is Capital Fund? How is it calculated?
A: Capital Fund: It is the Excess of assets over liabilities for non profit organisations is termed as…
Q: What does the financing activities include?
A: The statement of cash flows is the statement which shows the change in the cash and cash equivalents…
Q: Explain the Financing Activities?
A: Cash Flow Statement is a fundamental financial statement that renders valuable information regarding…
Q: What key factors must be considered when determining external financing requirements?
A: External financing in the capital structuring is defined as the funds, where the firms used to…
Q: What is meant by the incremental cost of borrowing additional funds?
A: Incremental cost as the name indicates is the additional cost which a borrower will incur if the…
Q: Explain acquisition, utilization of fund and assets management with example. Explain in details.
A: Acquisition:-It is a situation where a stronger company takes over the company which is less strong…
Q: If the key ratios are expected to remain constant, the AFN equation can be used toforecast the need…
A: Many times there are situations arise where the key ratios of the company remain constant in such a…
Q: provide Possible Sources of Initial Financing and explain it
A: Sources of finance refers to the money that a corporation uses to support its operations. An…
Q: estimate of external funds require
A: Calculation of external funds required- ERF = (A/S - L/S) ∆S- MS1(1-D) A/S = Total assets/Sales L/S…
Q: What is meant by fund accounting?
A: Fund accounting is a accounting method used by non profits entities or government organisations…
Q: The funds requirement can be forecasted by theforecasted financial statement approach, but youcould…
A: Additional funds required (AFN) is that the quantity of cash a corporation should raise from…
Q: What are the key factors on which external financing depends, as indicated in the AFN equation?
A: Introduction: Additional funds needed (AFN) is a financial term that is used when a company’s trying…
Determine External Funds Needed (EFN) and how it may be financed.
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- Problem 17-8 (AICPA Adapted) Sandy Company reported the following comparative statement of financial position at year-end: 2020 Assets 150,000 Cash and cash equivalents Accounts receivable Inventory Prepaid insurance Property, plant and equipment Accumulated depreciation 000'07 000'060'I 000'098 000'0 3,620,000 4,300,000 840,000) 720,000) 5,120,000 4,210,000 Liabilities and Equity Accounts payable Salaries payable Income tax payable Accrued interest payable Bonds payable Share capital Retained earnings Treasury shares 400,000 000'0 000'ss 000's 000'009 000'0 000 3,050,000 1,100,000 140,000) 3,050,000 760,000 5,120,000 4,210,00GLITTER INC.Condensed Balance SheetsDecember 31 Increase or (Decrease) 2020 2019 Amount Percentage Assets Current assets $124,600 $100,000 $enter a dollar amount enter your answer in percentages rounded to 1 decimal place % Plant assets (net) 394,800 329,000 enter a dollar amount enter your answer in percentages rounded to 1 decimal place % Total assets $519,400 $429,000 $enter a subtotal of the two previous amounts enter your answer in percentages rounded to 1 decimal place % Liabilities Current liabilities $85,994 $73,000 $enter a dollar amount enter your answer in percentages rounded to 1 decimal place % Long-term liabilities 128,828 86,000 enter a dollar amount enter your answer in percentages rounded to 1 decimal place % Total liabilities 214,822 159,000 enter a subtotal…Problem BPeter Senen Corporation provided the following account balances as of September 30, 2020: CashP112,000 Accumulated depreciationP 36,000Accounts Receivable64,000Accounts payable 40,000Finished Goods48,000Income tax payable9,000Work in process 36,000 Share Capital500,000Raw materials 52,000 Retained Earnings207,000Property and Equipment480,000The following transactions occurred during October:1. Materials purchased on account, P150,0002. Materials issued to production: direct materials- P90,000, Indirect materials- P10,000.3. Payroll for the month of October 2020 consisted of the following (also paid during the month):Direct labor P62,000Administrative salariesP16,000Indirect Labor 20,000Sales salaries 30,000Payroll deductions were as follows:Withholding taxes P19,800Phil health contributions P2,000SSS contributions 7,100HDMF contributions 2,0004. Employer contributions for the month were accrued:FactorySellingAdministrativeSSS contributionsP5,700P2,000P1,100Philhealth…
- 1. The following information is from Direct to You Corp.’s (DYC) financial records for its year ended December 31, 2020: Select statement of financial position information: 2020 2019 Investments in financial assets (at fair value through profit or loss [FVPL]) 12,000 10,000 Inventory 575,000 498,000 Property, plant, and equipment (PPE) 1,984,000 1,396,000 Less: accumulated depreciation (650,400) (487,000) Copyright 126,000 135,000 Patents 564,000 417,000 Select statement of comprehensive income information: Depreciation of property, plant, and equipment (334,400) Amortization of patents (65,000) Interest expense (75,000) Impairment loss — copyright (9,000) Gain on sale of PPE 23,000 Additional information: PPE that originally cost $570,000 was sold during the year. 100,000 common shares were issued in 2020 to acquire $450,000 of property, plant, and equipment. DYC is subject to IFRS. What amount of net cash used…King Limited Statement of Financial Position at 31 December 2020 2019 %24 Current Assets Cash %24 104,000 360,000 180,000 260,000 Accounts receivable Inventory Prepayments Total current assets 400,000 50.000 390.000 460.000 30000 954,000 Non-Current Assets Land Plant and eqguipment Accumulated depreciation - Plant and equipment Total non-current assets 1,500,000 1400,000 (500.000) 1,200,000 1,000,000 (400,000) 2400000 3,354,000 1800.000 2,690,000 Total assets Current Liabilities Accounts payable Accrued expenses Income taxes payable Total current liabilities 260,000 136,000 180,000 576,000 296,000 126,000 220.000 642.000 Non-Current Liabilities Long-term bank loan payable Total llabilities 700,000 1,276,000 600,000 1.242.000 Common Stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity B00,000 648,000 1448.000 2.690.000 1100,000 978,000 2.078,000 3,354.000 King Limited Statement of Profit or Loss For Year Ended 31 December 2020 Sales revenue Cost…The most recent financial statements for Crosby, Incorporated, appear below. Sales for 2022 are projected to grow by 20 percent. Interest expense will remain constant, the tax rate and the dividend payout rate also will remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. Sales Costs Other expenses Earnings before interest and taxes Interest expense Taxable income Taxes (24%) CROSBY, INCORPORATED 2021 Income Statement Net income Dividends Addition to retained earnings Current assets Cash Accounts receivable Inventory $31,335 69,745 $ 20,640 43,580 91,960 $747,000 582,000 18,000 FA $147,000 14,000 $ 133,000 31,920 $ 101,080 CROSBY, INCORPORATED Balance Sheet as of December 31, 2021 Assets Seved Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Total $ 54,800 14,000 $ 68,800 MA000
- CAPRI LIMITED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022 ASSETS Non-current assets Property, plant and equipment (cost) Accumulated depreciation Investments Current assets Inventory Accounts receivable Bank R 5 040 000 4 980 000 (1 260 000) 1 320 000 6 120 000 2 100 000 2 460 000 1 560 000 11 160 000 EQUITY AND LIABILITIES Equity 7 500 000 5 118 000 Ordinary Share Capital Retained Income 2 382 000 Non-current liabilities Loan Current liabilities Accounts payable Dividends payable 2 700 000 2 700 000 960 000 576 000 384 000 11 160 000The balance sheets for Plasma Screens Corporation and additional information are provided below. PLASMA SCREENS CORPORATIONBalance SheetsDecember 31, 2021 and 2020 2021 2020 Assets Current assets: Cash $ 138,880 $ 118,000 Accounts receivable 74,000 90,000 Inventory 93,000 78,000 Investments 3,800 1,800 Long-term assets: Land 460,000 460,000 Equipment 770,000 650,000 Less: Accumulated depreciation (408,000 ) (248,000 ) Total assets $ 1,131,680 $ 1,149,800 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 97,600 $ 83,000 Interest payable 5,500 11,800 Income tax payable 7,500 4,800 Long-term liabilities: Notes payable 100,000 200,000 Stockholders' equity: Common stock…The following information relates to the activities of Goalie Plc: Statement of financial position as at 30 April 2019 $'000 2020 $'000 Non-current assets Freehold land, cost Plant and equipment 2,100 2,340 990 3,090 1,092 3,432 Current assets Inventory 1,068 1,494 Receivables 990 912 Bank 90 2,148 5,238 2,406 5,838 Total assets Equity and liabilities Equity 2,808 3,750 Non-current liabilities: 6% debentures 1,350 750 Current liabilities Payables 720 690 Bank overdraft 378 Corporation tax 360 270 1,080 1,338 2,088 Total liabilities 2,430 Equity and liabilities 5,238 5,838 Income statement for the year ended 30 April 2020: $'00 13,560 (10,260) 3,300 Sales Cost of sales Gross profit Expenses (2,298) 1,002 Profit before tax Таx (450) Profit after tax 552
- Refer to the following data of SG Company: Assets to be realized1,375,000Liabilities liquidated1,875,000Assets acquired825,000Liabilities not liquidated1,700,000Assets realized1,200,000Liabilities to be liquidated2,250,000Assets not realized1,375,000Supplementary charges3,125,000Liabilities assumed1,625,000Supplementary credits2,800,000Compute the beginning cash balance assuming that the ending balance of ordinary share and retained earnings are P1,200,000 and (400,000), respectively.Refer to the following data of SG Company: Assets to be realized1,375,000Liabilities liquidated1,875,000Assets acquired825,000Liabilities not liquidated1,700,000Assets realized1,200,000Liabilities to be liquidated2,250,000Assets not realized1,375,000Supplementary charges3,125,000Liabilities assumed1,625,000Supplementary credits2,800,000Compute the beginning cash balance assuming that the ending balance of ordinary share and retained earnings are P1,200,000 and (400,000), respectively.A. P1,325,000b. P1,475,000c. P2,075,000d. P1,450,000the balance sheets for Plasma Screens Corporation and additional information are provided below. PLASMA SCREENS CORPORATIONBalance SheetsDecember 31, 2021 and 2020 2021 2020 Assets Current assets: Cash $ 242,000 $ 130,000 Accounts receivable 98,000 102,000 Inventory 105,000 90,000 Investments 5,000 3,000 Long-term assets: Land 580,000 580,000 Equipment 890,000 770,000 Less: Accumulated depreciation (528,000 ) (368,000 ) Total assets $ 1,392,000 $ 1,307,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 109,000 $ 95,000 Interest payable 7,000 13,000 Income tax payable 9,000 6,000 Long-term liabilities: Notes payable 110,000 220,000 Stockholders' equity: Common stock…
