Q1) Gates Industries balance sheet and income statement for year ending December 31, 1978 are as follows:
| Balance Sheet ($million) |
| Cash |
$ 10.0 |
Accounts payable |
$ 15.0 |
| Accounts receivable |
15.0 |
Salaries, benefits, & payroll taxes payable |
3.0 |
| Inventories* |
12.0 |
Long-term debt |
15.0 |
| Fixed assets (net) |
30.0 |
Stockholder' equity |
34.0 |
| Total Assets |
$ 67.0 |
Total liabilities & stock equity |
67.0 |
| Income Statement ($million) |
| Net sales (all credit) |
$ 125.0 |
| Cost of sales |
75.0 |
| Selling, general, & administration expenses |
30.0 |
| Other expenses |
13.0 |
| Earnings after tax |
7.0 |
Average inventories also equal $12.0 (million). Find out the length of the firm's cash conversion cycle.