We're Open
+44 7340 9595 39
+44 20 3239 6980

Virtual Organization

  100% Pass and No Plagiarism Guaranteed

Virtual Organization

Introduction

Organizations need additional funds from the external sources to increase the level of assets needed to support the companies increased sales. Getting the additional funding require in instrumental in managing the long-term liabilities. The ensuing segments look at the long term financial needs of Huffman Trucking in its bid to develop virtual operations where it will be one shop and key logistic entity.

External Funds Needed (EFN)

The external funding indicates the amount of money that will be required to finance the operation of business expansion. The method of getting the additional funds needed assumes that the company’s financial ratios will not change. The external funding for the Huffman Trucking is given by

Additional Funds Needed = Ao ×ΔS− Lo ×ΔS× S1 × PM × bSoSo

Where S1 are new levels of sales, L0 are the current liabilities, A0 are the current assets and b is the retention rate. The formulae have been designed to give out the external fund needed as the difference between the increase in the assets that the company has with the increase in liabilities and equity. A positive figure indicates that the company will require fund from the external sources and a negative figure will indicate that Huffman can be able to finance its operations in the year 2012 and beyond.

Additional Funds needed for the year 2012 = (162580 *0.08) – (99311*0.08*0.104)

= $12, 180, 000

This shows that the company will require addition $12, 180, 000 which cannot be generated from internal sources (that is the funding cannot be generated from the net income of the company). The fund can be obtained from the debt market or the equity market. In the debt market, the company will have high-interest loan payment obligations. In the equity market, the company will have to convince investors to provide capital. The company must raise $12, 180, 000 to finance the expected 8% sales growth. Extra cash requirement has mainly been caused by the costs of satellite warehouse and space rental costs as well as the cost of running the locations.

Year-End Ratios

The ration analysis indicates the profitability of the company and its liquidity.

  1. Profit As a Percentage of Sales

The profit as a percentage of sales (net margin) measures a number of dollars that the company retains as earnings after taking out all the expenses. The higher the net profit margin, the higher the performance of the company in the period under the consideration. This is given by the: Profit as a percentage of sales = net profit/.sales. The profit as a percentage of sales for the Huffman Truck in 2011 is 5.33%, and in 2012 is projected to be 10.32%. This shows that while in 2011 the company generated $0.0533 of earnings from every dollar of sale, in 2012 the company’s performance is projected to increase where it will generate $0.1032 per every dollar of sales.  The figures indicate that the profitability of the company is expected to in increase more than the increase in expenses.

  1. Current Ratio

The current ratio indicates the level of liquidity of an entity (Rao, 2013). A ratio of 1 indicates that the company can be bale to cover its short-term obligations when they fall due. In 2011, Huffman Truck had a current ratio of 1.63 which is expected to remain the same in 2012. A current ratio of 1.63 indicates that the company has a high ability to meet its short-term obligations when they fall due. This is an indication………………………………


100% Plagiarism Free & Custom Written,
Tailored to your instructions


International House, 12 Constance Street, London, United Kingdom,
E16 2DQ

UK Registered Company # 11483120


100% Pass Guarantee

STILL NOT CONVINCED?

View our samples written by our professional writers to let you comprehend how your work is going to look like. We have categorised this into 3 categories with a few different subject domains

View Our Samples

We offer a £ 2999

If your assignment is plagiarised, we will give you £ 2999 in compensation

Recent Updates

Details

  • Title: Virtual Organization
  • Price: £ 99
  • Post Date: 2024-08-28T18:23:38+00:00
  • Category: Research Paper Queries
  • No Plagiarism Guarantee
  • 100% Custom Written

Customer Reviews

Virtual Organization Virtual Organization
Reviews: 5

A masterpiece of assignment by , written on 2020-03-12

The support team is quite friendly and gives you the best solutions. I literally came here crying and went smiling like an idiot. My HR assignment is written beautifully with all the specifications I wanted. This is the best platform to get helped in assignments for me. All the people are supportive. Keep it up you all!
Reviews: 5

A masterpiece of assignment by , written on 2020-03-12

Now I am happy that I made the right decision of coming to Insta Research for help. My term paper was so technical and analytical at the same time. I got really confused about what to do but got relaxed when I was given such a humble writer. He clarified my concepts with the best explanations and discussions. I almost interacted with him on daily basis within the writing process. The best feature of this site is quick delivery as I got the work before my deadline. Additionally, the term paper is written skillfully and handled quite professionally. Now I am able to take a deep sigh of relief and thank you all for such speedy help. The quality of the work made my day.