A financial performance analysis of bundura nickel ltd by mr lenon watambwa (2019) abstract
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| =1.98 A score below 1.8 means it's likely the company is headed for bankruptcy, so BNC with a scores of 1.98 is not likely to go bankrupt. Value Chain Analysis Acc Receivable Turnover = Net Sales / Av Acc Receivable = 53 555 405/ 26 246 502 = 2.04 Days in Acc Receivable = Period / Av Acc Receivable = 365/ 26 246 502 = 0.000014 Acc Payable Turnover = Cost of Sales / Av Acc Payable = 34 696 726/ 13 793 732 = 2.52 Days in Acc Payables = Period Av Acc Payable =365/ 13 793 732 =0.000026 Interpretation: The firm has a higher trade receivables turnover which indicate a positive relationship with their debtors. This translates to the fact that, their debtors are paying off in the shortest possible time. In comparison with the industry, BNC has a favourable turnover of above 1.5 which means that there is a possibility of a close to zero percentage of bad debts. Electronic copy available at https://ssrn.com/abstract=3521211 24 Looking at the trade payables turnover, the firm also has recorded a higher value of 2.52 compared to the industry’s benchmark of 2.00. This means that the firm has favourable credit terms with its supplier and is in a position to payoff its debts in time. Overall, the relationship between BNC and its debtors and suppliers is favourable as it can be able to meet its supplier’s demands as well as receiving from its debtors at the shortest possible time. This is a competitive advantage to the firm as its operations are at an optimal level. However, based on BNC’s Financial Reports of 2018, there were some product cuts which were attributable to the closure of at least 43% of their mines. These product cuts did notwork in the firm’s advantage as their competitors sought to maintain the same products for the operations at a profit. Market analysis: Bindura Nickel Corporation (BNC) is in the mining index under the basic material sector ( www.zse.co.zw ). The sector is made up of four companies, RioZim, Falcon Gold Zimbabwe, BNC and Border Timbers. Download 1.23 Mb. Share with your friends:
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