Financial Analysis 2

In FS of 2024, Company A has revenue 10,000, GPM 20%, year-end inventory 2,000, what is the inventory turnover?

• 1 time

• 3 times

• 4 times

• 5 times

CTY Long Thai is major in metal processing business, revenue only from processing (raw material and inventory all provided by buyer), Days of Sales Outstanding (DSO, AR turnover days) 3 months, 2024 yearly revenue 120 million, GPM 50%. In 2025, buyer ask CTY Long Thai to purchase raw material by themselves, DSO remains the same, expected yearly revenue will increase to 240 million but GPM will reduce to 30%, Days of Payable Outstanding (DPO, AP turnover days) 0.5 month, Days of Inventory Outstanding (DIO, inventory turnover days) 1 month. Currently CTY Long Thai has only 60 million as working capital, what is the suitable response?

• Agree proposal from buyer, because GPM will increase 10 million

• NOT agree proposal from buyer, because working capital will lack of 5 million, will have tight cash flow

• Agree proposal from buyer, but require buyer to reduce AR payment terms to 2.5 months

• None of the above

Company A finds their profit is decreasing, therefore, they decided to extend the depreciation period of fixed asset from 5 years to 20 years. By doing so, they can have better cash flow statement.

• Yes, this is possible.

• No, this is not possible.

• No, it can only be extend to 10 years.

• This action should be proved by tax department then it can be changed.

Company ChaCha has current ratio 2, quick ratio 0.9, Inventory turnover ratio 3.2. If company ChaCha pays off corporate bond, what description is correct?

• Current ratio increase

• Quick ratio decrease

• inventory turnover ratio remained the same

• All of the above is correct

Here's the current assets item in balance sheet of Company CaRi: Cash in hand and at banks $5,000, Accounts Receivable $20,000, Inventory $10,000, Pre-paid to supplier $5,000, Accounts Payable $16,000, Pre-paid from buyer 2,000. As calculation, what is the amount of working capital demand?

• $17,000

• $19,000

• $14,000

• $15,000

Company ABC has the following operating metrics: DSO (Days of Sales Outstanding, AR turnover days) = 45 days, DIO (Days of Inventory Outstanding, Inventory turnover days) = 60 days, DPO (Days of Payable Outstanding, AP turnover days) = 50 days. What is the working capital demand of company ABC?

• Working capital demand is around 55 days

• Working capital demand is around 35 days

• Company ABC doesn't have any working capital demand

• Its DIO is lower than DPO, so cash flow is stable

As a Credit Officer, what is the first step you should do when you received the financial report from customer?

• Check the Audit opinion in the first page

• Check if the report contains Statement of Cash Flows

• Check if it's audited by Big Four accounting firms

• Check if audit explain the abnormal figure in report

Company BarBa mainly manufacturing plastic bottle, the operation info as below: Net Sales 100,000, material expense 35,000, Direct personnel Expense 35,000, Production machinery depreciation 10,000, Operating Expenses 8,000, other expense 2,000, what is their GPM?

• 65%

• 30%

• 20%

• 10%

Company DuDu has yearly fixed cost $600,000, variable cost is 75% of selling price. Company DuDu estimated next year they can sell 300,000 unit of product, company hope that the Net Income can be used to pay off bank loan interest. The bank loan until the end of March next year is $1,000,000, interest rate 4%. What is the lowest selling price for each product?

• $8.15

• $9.15

• $10.00

• $10.25

Company HaHa has Net Sales $100,000, COGS 25%, it leads company has lost $10,000, how can company HaHa adjust their operation?

• Reduce 10% operating expense, then company can have profit

• Reduce 5% GPM and Net sales increase to $120,000, then company can have profit

• Replace supplier, COGS reduce from 25% to 15%, can reach BEP

• All of the above is wrong