PART A As part of your analysis, you are required to investigate Carrium Insights Inc. cash flows and compute selected financial ratios using the financial statements provided Required:
Question 1
PART A
As part of your analysis, you are required to investigate Carrium Insights Inc.
Required:
(a) Calculate the following for 2020:
- Operating Cash Flow
- Net Capital Spending
- Change in Net
Working Capital - Cash Flow from Assets
- Cash Flow to Creditors
- Cash Flow to Stockholders
(b) A company’s asset utilization or turnover ratios are intended to display how efficiently or intensively a firm uses its assets to generate sales. Calculate the following turnover ratios for 2020:
- Inventory Turnover
- Days’ sales in inventory
- NWC Turnover
- Total Asset Turnover
PART B
The Finance Manager is trying to ensure that the company’s excess cash holdings are all invested in interest-bearing short-term instruments. Carrium’s bankers have provided details on enhanced savings accounts that is offered to business clients:
Option 1: Annual interest rate of 8%, compounded weekly;
Option 2: Annual interest rate of 8.25%, compounded monthly;
Option 3: Annual interest rate of 8.30%.
Required: Advise the Finance Manager on the best option.
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