Kota Fibres Ltd

2290 WordsJan 3, 201210 Pages
1. Problem Statement From the case study, we noted that several financial problems faced by Kota Fibres, Ltd. The problems are listed as below:- (a) The Company has liquidity problem, whereby it is in a negative cash position, i.e. cash borrowings is higher than its own cash. At the end of Dec 2001, it is forecast to have a debt outstanding of INR3.5 million; (b) In this current position, the Company would not be able to fulfill its promise to lending officer of All-India Bank & Trust Company of having to clean up seasonal line of credit for at least a month; (c) Looking at the Exhibit 2, we can observe that although the Company is forecasted its net sales registering growth of 20% in 2001, it does not translate to…show more content…
065,918 | 6,055,892 | 4,339,410 | 3,522,659 | 3,399,362 | Disburs.: | | | | | | | | | | | | | | | Accounts Paid (2) | | 1,438,866 | 1,591,054 | 2,446,072 | 4,842,338 | 7,637,058 | 9,673,607 | 8,973,543 | 4,715,053 | 2,767,050 | 2,446,072 | 1,942,469 | 1,521,878 | Capital Expenditures | | - | - | 350,000 | - | - | 350,000 | - | - | 350,000 | - | - | 350,000 | Interest Payments | | 9,469 | 14,275 | 30,902 | 71,883 | 138,591 | 217,157 | 253,676 | 195,925 | 98,195 | 37,904 | 13,184 | 1,362 | Excise Tax Paid | 15% | 392,418 | 433,924 | 667,111 | 1,320,638 | 2,082,834 | 2,638,256 | 2,447,330 | 1,285,924 | 754,650 | 667,111 | 529,764 | 415,058 | Operating Expenses | | 454,501 | 454,501 | 454,501 | 454,501 | 454,501 | 454,501 | 454,501 | 454,501 | 454,501 | 454,501 | 454,501 | 454,501 | Accrued Income Tax Paid | | - | - | - | - | - | 991,255

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