Financial Management

Running Head: Financial Management
Financial Management
University Name
Student Name

Financial Management
Contents
Question 1: Calculate the uses and sources of funds for the 2016 - 2018 periods.....................1
Question 2: Calculate the OFN and the WK for 2016-2018 periods and the expected levels
for 2019......................................................................................................................................3
Question 3: Calculate the BANK LOAN that will be required to finance the company growth
during 2019................................................................................................................................5
Question 4: Calculate the WACC of the Project in Germany. Also, explain why you use
particular inputs in the equation.................................................................................................8

Running Head: Financial Management
Question 1: Calculate the uses and sources of funds for the 2016 - 2018 periods.
Sources and Uses of
Funds 2017
XYZ Balance Sheet (M
euros) 2016 2017 Sources of Funds Uses of Funds
Cash and cash eq. 584.00 634.00 50.00
Acc. Receivable 3,928.05
4,453.2
3 525.18
Inventory 865.00 922.00 57.00
Current Assets 5,377.05
6,009.2
3
Fixed Assets 1,870.00
1,804.5
5 65.45
Total Assets 7,247.05
7,813.7
8
Banks (debt) 2,026.80
2,504.7
2 477.92
Acc. Payable 991.99 950.96 41.03
Deferred Taxes 40.00 20.00 20.00
Current Liabilities 3,058.79
3,475.6
8
Long Term Debt 2,010.00
2,010.0
0
Total Liabilities 5,068.79
5,485.6
8
Shareholders’ equity 2,178.25
2,328.0
9 149.84
Total Liabilities & Net
Worth 7,247.04
7,813.7
7 693.2 693.2
1

Financial Management
Sources and Uses of
Funds 2018
XYZ Balance Sheet (M
euros) 2017 2018 Sources of Funds Uses of Funds
Cash and cash eq. 634.00 773.00 139.00
Acc. Receivable 4,453.23 4,599.50 146.28
Inventory 922.00 975.00 53.00
Current Assets 6,009.23 6,347.50
Fixed Assets 1,804.55 1,741.39 63.16
Total Assets 7,813.78 8,088.89
Banks (debt) 2,504.72 2,880.54 375.82
Acc. Payable 950.96 749.04 201.92
Deferred Taxes 20.00 9.00 11.00
Current Liabilities 3,475.68 3,638.58
Long Term Debt 2,010.00 2,010.00
Total Liabilities 5,485.68 5,648.58
Shareholders’ equity 2,328.09 2,440.31 112.22
Total Liabilities & Net
Worth 7,813.77 8,088.89 551.2 551.2
The capital structure of XYZ Company in 2016 consists of total debt of 4,036.80 €m and total
equity of 2178.25 €m. Out of the total debt, 2,026.80 €m was from short term bank loans and
2,010 €m was from long term bonds/debt.
In 2017, the main sources of funds were 477.92 €m from bank loans, 65.45 €m from the sale
of assets/equipment and 149.84 €m from retained earnings after paying dividends of 224.77
€m from the net income of 374.61 €m. Out of the total sales some got stuck in the account
receivables, 525.18 €m on the net basis. Funds were used to increase the cash balance in the
bank account by 50 €m. Net funds used in the inventory were 57 €m, net funds used to pay
accounts payables were 41.03 €m and net funds used to pay deferred tax liabilities were 20
€m.