Modern LLC was established on December 2002. Till now they are working with a steady growth. One of the reasons is good working capital management. Given the data for the last year, opening account receivable RO 6500, closing account receivable RO 8900, net credit sales RO

Modern LLC was established on December 2002. Till now they are working with a steady growth. One of the reasons is good working capital management. Given the data for the last year, opening account receivable RO 6500, closing account receivable RO 8900, net credit sales RO

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 12P: Strickler Technology is considering changes in its working capital policies to improve its cash flow...

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For example, if you a simple average of 5 year of either income or cash flow of:year 1 100year2 100year 3 100year 4 100year 5 100total 500average 100cap rate 0.2value 500 Now you go to the balance sheet as of the valuation date and have a cash balance of $500 and the industry working capital benchmark is $200, is it fair to add $300 to the value of the business? That is really the question. In practice, particularly matrimonial valuations, some practitioners would opine, if the owner sells the business they would realize $500 in value plus $300 in excess working capital for a total value of $800. Remember the value included the $300 ($100 each year), possibly not distributed cash flow/earnings, is that really value?
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I already have the first 4 down working capital value: $2,790,000 current ratio value: 4.1 quick ratio: 2.5 accounts receivable turnover: 16 if someone can please please pleassseee help me with 5-18 please. I have been so stressed with this question and i just need answer and explanation please