Financial Markets and Bank Management Essay Example | Topics and Well Written Essays - 1000 words - 2

Financial Markets and Bank Management - Essay ExampleWe understand that you wish to plump your business operations and therefore, your fund requirement has increased. Our observations on your firms balance sheet are as per the following.The current ratio of the firm has declined in the year just completed though it still stays above 1.0 however, the quick ratio appears to be under strain. We notice that the acid-test ratio has gone pull down below 0.50 in the latest financial year. Net margin has also declined from 2.5 percent in year 2013 to 2.1 percent in the latest fiscal. Moreover, the net fill cover of the firm has also declined from 3.0 times to 2.7 times that provides marginal safety net for the firm in the current sluggish business environment. The declining stock employee turnover (in days) year after year is a good sign. In fact, it also establishes the declining needs of the working capital for your business. We have worked out the working capital requirement for your firm based on the information provided by you. The increased working capital requirement for the projected sales of 1,550,000 is likely to be 167,000 (working in annexure A). Considering the specialty of your balance sheet and increased working capital requirement, our bank increases existing overdraft limit from 90,000 to 180,000 and that should be adequate to meet your requirements.Our bank is in receipt of your loan request to increase the overdraft facility to 10,000. We understand that you have to meet some essential expenses such as school fees for your son. Kindly find our detailed retort to your loan application in the following paragraphs.We extend overdraft facility to our valued customers essentially to meet some contingencies and sort out temporary cash eat issues when you fail to receive your dues in time. Though you started with initial overdraft of 2,000 it has steadily increased and has reached to 3,600. We notice