Amalgamated Engineering plc makes specialised machinery for several industries. In recent years,…

Amalgamated Engineering plc makes specialised machinery for several industries. In recent years, the company has faced severe competition from overseas businesses, and its sales volume has hardly changed. The company has recently applied for an increase in its bank overdraft limit from £750,000 to £1,500,000. The bank manager has asked you, as the bank’s credit analyst, to look at the company’s application. You have the following information: (i) Statements of financial position as at 31 December 20X5 and 20X6 (iii) The general price level rose on average by 10% between 20X5 and 20X6. Average wages also rose by 10% during this period. (iv) The debenture stock is secured by a fixed charge over the freehold land and buildings, which have recently been valued at £3,000,000. The bank overdraft is unsecured. (v) Additions to plant and equipment in 20X6 amounted to £450,000: depreciation provided in that year was £300,000. Required: (a) Prepare a statement of cash flows for the year ended 31 December 20X6. (b) Calculate appropriate ratios to use as a basis for a report to the bank manager. (c) Draft the outline of a report for the bank manager, highlighting key areas you feel should be the subject of further investigation. Mention any additional information you need, and where appropriate refer to the limitations of conventional historical cost accounts. (d) On receiving the draft report the bank manager advised that he also required the following three cash-based ratios: (i) Debt service coverage ratio defined as EBITDA/annual debt repayments and interest. (ii) Cash flow from operations to current liabilities. (iii) Cash recovery rate defined as ((cash flow from operations proceeds from sale of non@ current assets)/average gross assets) : 100. The director has asked you to explain why the bank manager has requested this additional information given that he has already been supplied with profit-based ratios.

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more