当前位置:网站首页 >留学文书范文

热门问题

留学文书范文

Eastern Goldfields Limited Cash Budget Analysis
Eastern Goldfields operates in a situation where sales are paid on both cash and credit basis. The credit element is held collection for some time leading to borrowing. The company needs to change the cash budget policy by engaging maximum collection within the same month of sales. Scenario 1 is deemed fit to ensure the company attracts less borrowing and reduction of expense. Ensuring contractors pay 100% within the month of sale is a positive move on the collection of the company thus high cash or finance base. Eastern Goldfields Limited is not exceptional. The company has a borrowing policy which enables the company to obtain cash for inventory purchases as well as main other operations. The current borrowing rate of 6% annually and 0.5% monthly should be maintained. Based on the principles of financial stability and the going concern element, at 6% annually the company is termed as a minimal borrower an indication that the asset base and revenue of the company can meet most its requirements.
Despite the good percentage or borrowing policy, Eastern Goldfield must ensure some issues are met on the borrowing policy. Before establishing the new borrowing structure or policy, it is necessary to take note of the fact that the company has customer whose payments take time (debtors) hence vital to borrow at some point fill the financial gaps. The first vital point of the borrowing policy is ensuring lender concentration. Lender concentration is a policy that will ensure the 6% borrowing is obtained from one lending body. The 6% borrowing from one entity will ensure paying back period is well distributed.
Finally, Easter Goldfields should consider a reduced borrowing lending rate to 3%. This will ensure the company is well placed to improve on the collection of its sales and other revenues which are bound to ensure reduced borrowing. A reduction of the lending rate to 3%, will no doubt lead to a reduction of the borrowing rate. The lower lending rate will be a key figure in promoting upward sales trend and not decline as displayed by some periods of operation. In summary, the company will require little change in its policies to steer effective operation.[G1] 

Deleted:is
  • 留学文书写作
  • 留学指南
  • 服务价格
  • 留学DIY申请
  • 联系我们