The owner of Supreme Fitness has requested your assistance as financial manager in advising on the possible funding options the business has at its disposal in order to grow the business. There is potential for growth as people look to follow a healthier lifestyle after the Covid pandemic. Supreme Fitness is looking at increasing their footprint by opening smaller gyms within shopping centres because of cheaper rentals on offer due to spare capacity and also to offer outdoor training classes. He has provided you with the following extract from the financial statements R Long Term Loan 400 000 Capital at beginning of year 375 000 Payables Control 60 000 Receivables Control 15 000 Profit for the year 225 000 Drawings 19 750 REQUIRED: Q.4.1 Write a report to the owner in which you discuss 21; 22; 23 what the financing role entails for you as a financial manager; and calculate the necessary ratio to comment on the gearing of the business as it currently stands. The industry average is currently 50%. Q.4.2 Discuss the agency problem.

The owner of Supreme Fitness has requested your assistance as financial manager in advising on the possible funding options the business has at its disposal in order to grow the business. There is potential for growth as people look to follow a healthier lifestyle after the Covid pandemic. Supreme Fitness is looking at increasing their footprint by opening smaller gyms within shopping centres because of cheaper rentals on offer due to spare capacity and also to offer outdoor training classes. He has provided you with the following extract from the financial statements R Long Term Loan 400 000 Capital at beginning of year 375 000 Payables Control 60 000 Receivables Control 15 000 Profit for the year 225 000 Drawings 19 750 REQUIRED: Q.4.1 Write a report to the owner in which you discuss 21; 22; 23 what the financing role entails for you as a financial manager; and calculate the necessary ratio to comment on the gearing of the business as it currently stands. The industry average is currently 50%. Q.4.2 Discuss the agency problem.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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