Fin621 Current Spring 2011 Final Term VU Paper [July 2011] Virtual University of Pakistan
Question 1: ( Marks: 5 )
Assume that you are a commercial loan officer at a large bank. One of your clients recently submitted an application for Rs. 300,000 five year loan. You have worked with this business before on numerous occasions and have periodically been forced to deal with late and missed payments attributed to cash flow problems. Thus you are surprised to see in the business plan accompanying the application that the management expects to reduce the company s operating cycle from 190 days to 90 days. A footnote to the business plan indicates that the reduction in the operating cycle will result from a tighter credit policy and the implementation of a just-in-time inventory system.
Assume that you are a commercial loan officer at a large bank. One of your clients recently submitted an application for Rs. 300,000 five year loan. You have worked with this business before on numerous occasions and have periodically been forced to deal with late and missed payments attributed to cash flow problems. Thus you are surprised to see in the business plan accompanying the application that the management expects to reduce the company s operating cycle from 190 days to 90 days. A footnote to the business plan indicates that the reduction in the operating cycle will result from a tighter credit policy and the implementation of a just-in-time inventory system.
Requirement:
Would the company be able to reduce the operating cycle by applying the new strategy and would you give the loan to the company on this basis?
Question # 2:What do you understand by the efficiency of the operating cycle?
Question # 3:percentage of net income to sales
Question # 4: calculate ROI
Question # 5:Table was given and there were missing figures I have to fill them
Question # 6:WHY fifo is used in inflation?
Question # 7:Quick rato and curent assets
Would the company be able to reduce the operating cycle by applying the new strategy and would you give the loan to the company on this basis?
Question # 2:What do you understand by the efficiency of the operating cycle?
Question # 3:percentage of net income to sales
Question # 4: calculate ROI
Question # 5:Table was given and there were missing figures I have to fill them
Question # 6:WHY fifo is used in inflation?
Question # 7:Quick rato and curent assets
