Working Capital Management
ICAN Business, Management and Finance

QUESTION 1 Kaduna Textile Mills Plc (KTM) is a manufacturing company listed on the Nigerian Exchange Group (NGX). The company produces a range of cotton fabrics for both domestic and export markets. …

QUESTION 2 Lagos Fresh Foods Limited (LFFL) is a privately owned food processing company based in Ikeja, Lagos. The company processes and distributes fresh tomato paste, pepper sauce, and vegetable o…

QUESTION 3 Delta Agro-Allied Industries Plc (DAAI) is a large agro-processing conglomerate quoted on the Nigerian Exchange Group (NGX). The company processes palm oil, groundnut oil, and cassava-base…

Lagos Retail Plc is evaluating an early settlement discount of 2/10 net 60 offered by its supplier. The company's cost of short-term borrowing is 24% per annum. Should the company take the discount? (…

Lagos Retail Plc is offered credit terms of 2/10 net 60 by its supplier. The company's cost of short-term borrowing is 24% per annum. Using a 365-day year, what is the approximate annualised cost of f…

Which of the following statements correctly describes the treatment of Value Added Tax (VAT) under the Value Added Tax Act (as amended by the Finance Acts 2019 and 2020) in the context of working capi…

Eko Distributors Plc reported annual credit sales of ₦72,000,000. The average trade receivables balance during the year was ₦12,000,000. If the company wishes to reduce its receivables collection peri…

Kano Textiles Limited has annual credit sales of ₦120,000,000. Its receivables collection period is 75 days. The company considers a 1.5% early settlement discount to cut the collection period to 30 d…

Under IAS 7 (Statement of Cash Flows) as adopted by the Financial Reporting Council of Nigeria (FRCN), an increase in trade receivables during a reporting period is treated as which of the following i…

Port Harcourt Chemicals Plc uses the Economic Order Quantity (EOQ) model to manage its raw material inventory. Annual demand is 36,000 units, ordering cost is ₦2,500 per order, and the holding cost is…

Kano Textiles Limited has annual sales of ₦120,000,000 (all on credit). Its current receivables collection period is 75 days. The company is considering offering a 1.5% early settlement discount to re…

Under the provisions of the Companies and Allied Matters Act (CAMA) 2020, which of the following best describes the primary obligation of a company's directors regarding the management of working capi…

Abuja Foods Limited purchases raw materials worth ₦54,000,000 annually on credit. The average trade payables balance is ₦7,500,000. The raw materials holding period is 60 days, work-in-progress period…