Page 313 - AFM Integrated Workbook STUDENT S18-J19
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Corporate failure and reconstruction
SOFP Current 1 2
$000 $000 $000
Non-current assets 118,440 154,440 118,440
Current assets 22,490 24,858 21,258
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Total assets 140,930 179,298 139,698
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Equity and liabilities
Share capital 60,000 60,000 48,000
Reserves 45,320 47,688 20,088
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Total equity 105,320 107,688 68,088
Non-current liabilities 20,000 56,000 56,000
Current liabilities 15,610 15,610 15,610
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140,930 179,298 139,698
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Workings and notes:
Proposal 1 (looks like the easier option, so start with that)
Easy figures: Increase NCA by $36m and increase NCL by $36m.
No change to share capital, and no information to the contrary so assume
CL stay the same.
Adjust forecast after-tax profit to include extra income from new
investments and increased interest charges (both on the new bonds and
the increased coupon on the existing bonds).
Adjust reserves figure to reflect likely increase in earnings of $2.368m,
then balance off SOFP, entering CA as a balancing figure.
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