International Trade Finance Based on Data Stresswise LTD - 825 Words

International Trade Finance Based on Data: Stresswise LTD (Term Paper Sample) Content: INTERNATIONAL TRADE FINANCEINTERNATIONAL TRADE FINANCE[Writerà ¢Ã¢â€š ¬s Name][Institutionà ¢Ã¢â€š ¬s Name]INTERNATIONAL TRADE FINANCE 1 Financial Forecast:STRESSWISE LTD Income Statement for the Year ended January 31, 2016  ($ Million)   Sales 14.91 less: Cost of Goods Sold (8.19) Gross Profit 6.72 Less: Selling, Admin and Distribution expenses (5.36) Earnings before interest and tax 1.37 Less: Interest expense (0.84) Earnings before taxes 0.53 Less: Income Taxes (0.21) Net Income 0.32   Balance Sheet as at January 31, 2016  ($ Million) Current Assets  Cash 0.1 Account receivable 3.6 Inventory 3.8 Total Current Assets 7.5 Property, Plant and Equipment  Land, Buildings Equipment 1.0 Buildings 2.8 Equipment 0.9 Vehicles 0.5 Total Property, Plant and Equipment 5.2 TOTAL ASSETS 12.7   Current Liabilities  Bank Overdraft 3.6 Accounts Payable 1.8 Total Current Liabilities 5.4 Long-term Liabilities  Debentures ( secured on Land) 3.5 Total Liabilities 8.9 Shareholder's Equity  Common Shares 2.0 Retained Earnings 1.8 Total Shareholder's Equity 3.8 Total Liabilities and Shareholder's Equity 12.7   2 Liquidity and Efficiency Ratios:Activity Ratios Days of inventory 365.0 Inventory turnover 1.0 Average collection period 88.1 Total Asset Turnover 1.2 Liquidity Ratios Current ratio 1.39 Quick ratio 0.69 Working capital 2.10 Activity ratios:Days in inventory ratio reveals efficiency in the management of inventory. Days are expected to be higher here, which is not a good sign to the company.Inventory turnover shows the inventory turns number on yearly basis. Expected to be higher here, this is not a good sign to the company.Average collection period reveals the average span of time a company waits for sale proceeds. The period 88 days on average here is shorter one, which is favorable for the company.The total assetà ¢Ã¢â€š ¬s turnover ratio of 1.2 is revealing that each $1 ass et of the company is generating about $1.2 of sales.Liquidity Ratios:Current ratio reveals an entityà ¢Ã¢â€š ¬s capability of paying current liabilities utilizing the assets which are convertible to cash in a shorter time period. The ratio of 1.39 is showing that the company has $1.39 of current assets to pay the current liability of every $1.Quick ratio reveals an entityà ¢Ã¢â€š ¬s capability of paying current liabilities through utilizing its quick assets. The ratio of 0.69 is showing that the company has $0.69 of current assets to pay the current liability of every $1.Working capital ratio is showing that the company has $2.10 Million current assets in excess of its current liabilities. 3 Amount to be paid to suppliers:The formula for calculating the Days payable outstanding (DPO) is;Days payable outstanding = (average accounts payable / cost of goods sold) * 365 daysDays payable outstanding = 1.8 / 8.19 * 365Days payable outstanding = 80 DaysTherefore the current dayà ¢Ã¢â€š ¬&tra...