Ridgeway Ltd is a company that has manufactured steel shelving systems for sale to retail customers. In 2017 the directors decided following the Brexit vote to expand into the industrial market. On 1 April 2018 it raised a five year loan of £6.4m at 8% interest +with repayments starting on 1 April 2019, invested £8m in new plant which became fully operational on that date and undertook an advertising campaign in trade journals. Sales increased and the company paid a dividend of £524,000 on 1 October 2018. Draft statements of financial performance and position are as follows: Required (a) Prepare a statement of cash flows for the year ended 31 March 2019. (b) Explain the points you would raise when approaching the bank seeking to maintain the bank overdraft at its current level

Ridgeway Ltd is a company that has manufactured steel shelving systems for sale to retail customers. In 2017 the directors decided following the Brexit vote to expand into the industrial market. On 1 April 2018 it raised a five year loan of £6.4m at 8% interest +with repayments starting on 1 April 2019, invested £8m in new plant which became fully operational on that date and undertook an advertising campaign in trade journals. Sales increased and the company paid a dividend of £524,000 on 1 October 2018. Draft statements of financial performance and position are as follows: Required (a) Prepare a statement of cash flows for the year ended 31 March 2019. (b) Explain the points you would raise when approaching the bank seeking to maintain the bank overdraft at its current level

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter7: Valuation Of Stocks And Corporations

Section: Chapter Questions

Problem 1hM

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Ridgeway Ltd is a company that has manufactured steel shelving systems for sale to retail customers. In 2017 the directors decided following the Brexit vote to expand into the industrial market. On 1 April 2018 it raised a five year loan of £6.4m at 8% interest +with repayments starting on 1 April 2019, invested £8m in new plant which became fully operational on that date and undertook an advertising campaign in trade journals. Sales increased and the company paid a dividend of £524,000 on 1 October 2018. Draft statements of financial performance and position are as follows: Required (a) Prepare a statement of cash flows for the year ended 31 March 2019. (b) Explain the points you would raise when approaching the bank seeking to maintain the bank overdraft at its current level. Please proper explain and do not copy from Chegg. Otherwise I have to report the answer.
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The president of Maluwana Pvt made this statement in the company’s annual report: Maluwana’s primary goal is to increase the value of the common stockholders’ equity over time.” Later on in the report, the following announcements were made:a) The company contributed K3.7million to the symphony orchestra in Chelstone, Lusaka its headquarters city.b) The company is spending K750 million to open a new plant in Tanzania. No revenues will be produced by the plant for 5 years, so earnings will be depressed during this period versus what they would have been had the decision not been made to open the new plant.c) The company is increasing its relative use of debt. Whereas assets were formerly financed with 35 percent debt and 65 percent equity, henceforth the financing mix will be 50-50.d) The company uses a great deal of electricity in its manufacturing operations, and it generates most of this power itself. Plans are to utilize nuclear fuel rather than coal to produce electricity in the…
Auto Motors Plc is a listed automotive company financed by a mixture of debt and equity. The company’s finance department is about to undertake its annual revision of the weighted average cost of capital (WACC) for use in all of the company’s investment appraisals for the forthcoming year. The following information on the company’s long-term financing was available as at 31 May 2023. £m 220 million ordinary shares of 25 pence each 55 Share premium 23 Revaluation reserve 26 Retained earnings 33 12% loan stock (2025) 100 The loan stock interest for the year has just been paid. Interest on this loan will be paid on 31 May 2024 and 2025. On 31st of May 2025, the loan stock will…
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