Questions North Star:

1) Set up Financial report for 2007 (zie andere bladzijden)2) Do you expect financial problems during 2007? If so, propose a solution.

Gedurende 4 maanden zijn er negatieve cash flows (zie cash budget). Liquiditeit is hier een belangrijke maatstaf ( bankruptcy).

Liquiditeitsratio (balans): current assetsKT liabilities =

800+10+96100+125 =

906225 = 4 > 1! Dus geen probleem, want

balans is ‘foto’ van situatie in december, doorheen het jaar evalueren Cash Budget.

Mogelijke oplossingen:

A. Extension payment delay suppliersB. Shortening payment time customers, but the customers won’t be happy and (maybe) go

elsewhere. So a better solution would be to give them a reduction, of course “the less the better”, but the reduction has to be interesting. Hoe bepalen of korting interessant is? vergelijken met rente op bank! What do I get for putting my money on the bank RenteWhen I loan money interestPayment condition 1%/0/301% if, cash betalen, anders 30 dagen betalingsuitstel MAAR korting moet aantrekkelijk genoeg zijn; bank leent alleen aan 10%; 1%*12 = 12% dus beter dan 10%, dus aantrekkelijk!

C. Creating new receipts= Lease & Sell-back, vb. leasing car (you can use it, pay rent)Here you could sell your assets to leasing companies, but you lease it back. Nadeel: je kan je activa maar 1 keer verkopen!

D. Cutting costs Vb. Ford België

E. More depreciation in the beginning = degressief afschrijven! (altijd)In this way you pay less taxes, but you may think that the effect balances out (later you pay more taxes) BUT TIME VALUE OF MONEY!! There is one exception (when not?): wanneer net income negatief wordt, want equity capital daalt dit betekent dat de solvabiliteit daalt (≠leningen meer krijgen).

F. Bank: short term loan à vb. 10% yearly. 3) What adjustments should be introduced to the solutions of questions 1 and 2 if the

company should extent, by one month, the term of payment of the customers (starting with the sales from January 2007)? - No changes in income statement - Changes in balance sheet: cash and accounts receivable- Changes in cash budget: nog negatievere waarde!

4) What adjustments should be introduced to the solutions of questions 1 and 2 if the suppliers of raw materials should allow (starting with the purchases from January 2007) one extra month of the credit term ?Uitgaven grondstoffen schuiven allemaal met 1 maand op.

This will have a positive effect. Balance sheet: accounts payable wordt 250 (tweemaal 125) en cash wordt 221 (of 451?).

5) What adjustments should be introduced to the solutions of questions 1. and 2. if the company decides to increase the inventory of raw materials by an amount of 100 ?- if the increase will be effected in January 2007 ?Income statement does NOT change.Balans: inventories increase, cash decreases = so only assets change; buy more from suppliers, so cash position also changes.The ending cash position will be worse in January and Ferbruary.The ending cash position will be worse in December (= new problem).So this is worse, now there are 2 problems!- if the increase will be effected in December 2007?Wijzigt vanaf januari 2008. De inventaris op de balans stijgt met 100. Cash daalt met 100.

6) What adjustments should be introduced to the solutions of questions 1 and 2 if the Tax Administration should agree with another method of depreciation ?In this case the North Star Company should be allowed to increase the depreciationcosts in 2007 with an amount of 100.Income statement verandert: afschrijvingen stijgen met 100, dus KVG stijgt met 100, met als gevolg dat de winst voor belasting daalt met 100 (= nu 32) waardoor de belasting tot slot daalt met 50. Balance sheet: op de passiva-kant verandert net income, op de activa-kant stijgt cash (tot 146, hoezo?) en plant & equipment daalt (5045+220-220(ipv van -120)).Taxes: 8 in July and 8 in October + net profit = 16 This is less interesting than before.Ending cash position in December is higher (why?).

7) What adjustments should be introduced if, in December 2007, a machine with an accounting value of 100 should be sold for an amount of 150 (cash payment)?Income statement: revalues increases (HWMW) Sales stijgen met 50 (BW= 100 >< VP=150), taxes=91 (ipv 66). Cash budget: in December you get cash cash position is now better (150€ extra in December, July & October veranderen omwille van taxes). Balance sheet: cash verandert; net income verandert; plants & equipment veranderen.