Question:
Mr. Good after graduating from a Local Business University (LBU) has recently joined Saving Bank Limited (SBL) as a Management Trainee Officer (MTO). On one training day, his instructor gave him a task to identify current and long term assets from the following list:
a) Gold reserves b) Accrued mark-up
c) Investment in bonds d) Marketable securities
e) Operating fixed assets f) Investment in associates
g) Deferred tax (Dr. Balance) h) Deferred tax (Cr. Balance)
i) Lending to other financial institutes j) Cash and balances with treasury banks
k) Assets subject to finance lease l) 8 years' Subordinated Loans (Cr. Balance)
m) Provision for taxation n) Derivative financial liabilities
o) Capital work in progress
Required: Owing to poor level in accounting, Mr. Good is unable to do the task and has approached you for gracious help. You are required to do the task as requested earlier.
MGT201 GDB Question:
Suppose, Mr. Hussain is a leather supplier to ABC Company, a manufacture of leather shoes; and XYZ Company, a manufacturer of leather wallets for men. Both companies purchase leather on credit from Mr. Hussain and agree to pay within 90 days. Upon completion of agreed time period, ABC Company pays off its liability but XYZ Company remains unable to make the due payment.
Current Ratio of both companies are as follows:
Required:
Keeping in view the above given information, being a financial analyst, you need to analyze that:
(Give logical justification and reasoning of your answers).
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