1. Develop a questionnaire and checklist that you would use for new clients to ensure you have collected all the necessary information regarding the business and their financial position

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PFBPI - ONLINE ACTIVITY 1

Read the following information and provide the answers to the questions asked:

You work as a financial accountant who helps up and coming businesses expand. In your role you assist with advice on the financial options available to them and how to handle various key aspects of their business such as; working capital management, especially inventory, accounts receivable, loan structures and their legal obligations.

You have a new client, Mean Machines Pty Ltd who manufactures heavy haulage trucks. Some useful information about Mean Machine Pty Ltd follows.

The average truck costs $235,000 to manufacture and takes 10 weeks to manufacture.
Sale price of each truck is $434,000.
Account payable terms are 30 days.
Account receivable terms are 60 days.
There is currently $423,000 of accounts receivable outstanding for more than 90 days.
Mean Machines Pty Ltd is a family owned business.
Current level of overdraft is $1m @ 17.5% interest per annum
The company wishes to open an additional factory site in the next year and needs to raise $5m to fund this.
The current factory loan is $800,000 @ 12.5% interest over 30 years.
They wish to purchase 6 Mazda 2 cars @ $24,000 each in the next year for use in the business
Net annual turnover is $3.25m
Net asset worth is $7.5m
They have 960 employees from a variety of cultural backgrounds

Requirements:

Develop a questionnaire and checklist that you would use for new clients to ensure you have collected all the necessary information regarding the business and their financial position.
Suggest options on how Mean Machines Pty Ltd should manage their inventory in order to smooth out cash flow.
Assess Mean Machines current factory loan. Would better loan options available to them? Provide suggestions and assess the interest savings from your suggestion.
Explain different ways the company can fund their expansion. Provide examples and discuss what you would recommend and why.
Identify legislation that the company would need to ensure they comply with? Give a summary and highlight key areas of importance.

1. Develop a questionnaire and checklist that you