Do you believe the credit risk has increased have the


Mr X has recently joined as Relationship Manager of PQRZ Bank. As he was going through the latest financial statements of Hypothetical Manufacturing Ltd, he found the following information:

$ in millions

Particulars

31.12.20X8

31.12.20X9

a. Average stock holding period

75 days

140 days

b. Average debtors collection period

90 days

187 days

c. Average creditors payment period

92 days

29 days

d. Tangible net worth

25m

11m

e. Bank borrowings

12m

27m

f. Profit for the year

7m

0.5m

Is there any deterioration in the working capital cycle during the year ended 31.12.20X9? Do you believe the credit risk has increased? Have the owners of the Hypothetical Manufacturing Ltd withdrawn funds from the business as dividends? Explain your views and possible mitigation steps, if required.

Request for Solution File

Ask an Expert for Answer!!
Risk Management: Do you believe the credit risk has increased have the
Reference No:- TGS01232728

Expected delivery within 24 Hours