Question-   CORPORATE FINANCE - WORKING CAPITAL SIMULATION

Solution-

Answer

  The first decision was to acquire a new customer , this decision led to increase in sales by approximately 4 million and thus increase in EBIT. Even though the sales were increasing but the increase in accounts receivables and inventory balance was increasing which was a part to worry.

 

  • The second decision was to accept the decision of Leverage Supplier Discount, this decision led to an increase in SNCs topline growth , increasing sales revenue by 2 million though a shortfall of cash was seen in 2013. But this drain in cashflow was offset by an increasing EBIT.

 

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