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[Situation]
Imagine you run a company that sells a medical device to small
healthcare facilities such as urgent care clinics.
You have to pay for the Bill of Materials that go into manufacturing/assembling your medical device
upfront but your customer pays you on net 30, net 45, or net 60 terms after delivery (depending on their contract with you) when they get paid by health insurers or the government, and it generally takes a month from purchasing materials to finished product ready to ship.
Many customers pay late. You sell about $1.8M of these devices a month, and sales have been
growing at 30% month-over-month. You have $3.6M of total outstanding
Accounts Receivable as of the end of Nov 2020 and $6.4M in the bank running
at breakeven (on an accrual basis).
Q1. How long until you're out of cash even though the business itself isn't losing money?
Q2. What OKR(s) would you set for the account management and finance team(s) for the next month / quarter to avoid this outcome while preserving growth?
Kok Kiang Company buys a bus at RM140,000. The useful life of the bus is eight years. If the book value at the end of four years is RM80,000, find the scrap value of the bus at the end of eight years using the straight line method
A 10% down payment for a house is RM10,000. The balance has to be repaid by making monthly instalments for ten years. If the interest rate charged is 6% per annum on reducing balance, calculate, using the Constant Ratio formula, (a) the cash price of the house, (b) the total interest charged, (c) the instalment price, and (d) the monthly payment
A retailer received an invoice for the purchase of twenty rackets at RM140 each. He was given trade discounts of 15% and 5%. The cash discount terms on the invoice were 3/10, n/30. (a) Determine the single trade discount rate that is equivalent to the chain discounts. (b) Calculate the amount of payment if it is made one week after the date of invoice.
Find the book value at the end of four years for a machine which costs RM60,000. Use the declining balance method with an annual rate of 18%.
Kok Kiang Company buys a bus at RM140,000. The useful life of the bus is eight years. If the book value at the end of four years is RM80,000, find the scrap value of the bus at the end of eight years using the straight line method.
A 10% down payment for a house is RM10,000. The balance has to be repaid by making monthly instalments for ten years. If the interest rate charged is 6% per annum on reducing balance, calculate, using the Constant Ratio formula, (a) the cash price of the house, (b) the total interest charged, (c) the instalment price, and (d) the monthly payment
A retailer received an invoice for the purchase of twenty rackets at RM140 each. He was given trade discounts of 15% and 5%. The cash discount terms on the invoice were 3/10, n/30. (a) Determine the single trade discount rate that is equivalent to the chain discounts. (b) Calculate the amount of payment if it is made one week after the date of invoice
A down payment of 15% plus 6 monthly payments of $320
Imagine you have inherited $25 000 and have decided to make various investments to increase the value of your inheritance. Each investment is made at the beginning of the year and then liquidated or sold at the end of the year.
