Assignment GDB Solution: ACC501 Business Finance

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ACC501 Business Finance GDB Solution 2018

Debt-equity (D/E) ratio indicates that how many times a corporation has external funds in comparison to its equity (internal funds). Generally, corporations try to maintain this ratio up to a reasonable range to be in sound financial position. A better D/E ratio ensures better-paying capacity of both principal and the interest. Different industries have different […]

ACC501 Business Finance Assignment 1 Solution Fall 2017

The Case: Mr. Imran wants to establish a business of manufacturing spare parts of 70cc motorcycle. He estimates a start-up cost of business with heavy machinery of worth Rs. 30 million. He further projects that the revenue (before tax and depreciation) from the business will be Rs. 8 million for the first year and it […]

ACC501 Business Finance GDB 1 Solution 2017

Inventory turnover ratio measures the number of times an inventory item is sold or used in during a given time period. Generally, there is no norm for this ratio and it is appreciated to be compared against industry average. A high turnover ratio shows that company is turning its inventory into cash quickly, resulting a […]

ACC501 GDB Solution Spring 2017

Current ratio is an important financial analysis tool with an aim to determine the liquidity position of any business entity. It is determined by dividing current assets with current liabilities. Generally, for manufacturing and trading businesses, current ratio is preferred to be equal to 2. A current ratio of less than 1 would mean that […]

ACC501 Business Finance GDB 2 Solution Feb 18 2015

Discussion Question: If NPV is considered as the best technique for capital budgeting, why do the financial analysts use other measures? Discuss with conceptual rationale. Solution: NPV is based on future cash flows and the discount rate, both of which are hard to estimate with 100% accuracy. There is an opportunity cost to making an […]

ACC501 Business Finance Assignment 1 Solution Fall 2014

Question: Below is the balance sheet and income statement of Mega Corporation for the year ended June 30, 2013. Mega Corporation Balance Sheet As of June 30, 2013 Assets Rs. (million) Current Assets Cash 225 Accounts receivables 310 Inventory 328 Total Current Assets 863 Fixed Assets Plant and Equipment 7077 Less Depreciation 550 6527 Furniture […]

ACC501 Business Finance GDB 1 Solution Spring 2014

Discussion Question: Payback period is an important capital budgeting technique. We can define payback period as “length of time taken to recover initial investment of a project”. Despite of having many disadvantages, many multinational (Big) organizations use this technique for decision making purpose. You, as a student of business finance, are required to discuss the reasons for which the said organizations use […]

ACC501 Business Finance GDB 1 Spring 2014

ABC Company is engaged in the manufacturing of electronic equipment. The Company has reported net loss for the year 2013 but its Cash Flow Statement is showing a positive net cash flow. Being a student of Business Finance, you are required to discuss briefly the reasons behind the difference between net result of Income Statement and Cash Flow Statement. Solution: The cash flow statement […]

ACC501 Business Finance Assignment 2 Solution Fall 2013

ASSIGNMENT: Mr. Ali is a potential investor of stocks (equity); he prefers to invest in equity securities rather than the debt securities. He collects information of different companies having share capital and will select two most appropriate companies as per his own knowledge. But he is confused while selecting the best company of the two. […]