Problem: Cash Conversion Cycle. Calculate the accounts receivable period, accounts payable period, inventory period, and cash conversion cycle for the following firm:
Income statement data:
Sales 5,000
Cost of goods sold 4,200
Balance sheet data:
Beginning of Year End of Year
1. Inventory 500 600
2. Accounts receivable 100 120
3. Accounts payable 250 290
Determine the following:
4. If assets are $7,000 and capital is $2,000, what are liabilities?
5. If capital is $17,000 and liabilities are $8,000, what are assets?
Cash Flow Statement:
Use the following balance sheet information and other data to determine net cash from operating activities:
December 31, 2000 December 31, 2001
Account Receivable $ 4,000 $ 7,000
Merchandise Inventory 10,000 8,000
Prepaid Insurance 1,000 700
Accounts Payable 12,000 6,000
Rent Payable 9,000 16,000
Dividend Payable 2,000 2,500
Bonds Payable 50,000 40,000
Other Data:
Net Income $25,000
Depreciation Expense 5,000
Amortization of Goodwill 3,000
Amortization of bond premium 900
Gain on sale of plant 4,400