EBK FOUNDATIONS OF FINANCE
10th Edition
ISBN: 9780135160473
Author: KEOWN
Publisher: PEARSON CO
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Question
Chapter 15, Problem 3SP
a)
Summary Introduction
To determine: Days sales outstanding and days sales in inventory of Company C.
b)
Summary Introduction
To determine: Cash conversion cycle of Company C for each of the 5 years and evaluate overall management of its working capital.
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Analyzing Cash Flow Ratios
Meagan Enterprises reported the following information for the past year of operations:For each transaction, indicate whether the ratio will (I) increase, (D) decrease, or (N) have no effect.
Transaction
FreeCash Flow$400,000
Operating-Cash-Flow-to-Current Liabilities Ratio1.1 times
Operating-Cash-Flow-to-Capital Expenditures Ratio5.0 times
a. Recorded credit sales of $17,000
b. Collected $6,000 owed from customers
c. Purchased $50,000 of equipment on long-term credit
d. Purchased $70,000 of equipment for cash
e. Paid $17,000 of wages with cash
f. Recorded utility bill of $14,750 that has not been paid
See the cash flow statement
LOADING...
(all values in thousands of dollars) (see MyLab Finance for the data in Excel format):
a. What were the company's cumulative earnings over these four quarters? What were its cumulative cash flows from operating activities?
b. What fraction of the cash from operating activities was used for investment over the four quarters?
c. What fraction of the cash from operating activities was used for financing activities over the four quarters?
a. What were the company's cumulative earnings over these four quarters?
The cumulative earnings were $enter your response here
(000). (Round to the nearest integer.)
Part 2
What were its cumulative cash flows from operating activities?
The cumulative cash flows from the operating activities were $enter your response here
(000). (Round to the nearest integer.)
b. What fraction of the cash from operating activities was used for investment over the four quarters?
The fraction of the cash from operating…
Construct the current assets section of the balance sheet from the following data. (Use cash as a plug figure after computing the other values.) (Use a 360-day year. Do not round intermediate calculations.)
Yearly sales (credit)
$
570,000
Inventory turnover
10
times
Current liabilities
$
97,000
Current ratio
2
Average collection period
36
days
Current Assets:________
Cash:_________
Accounts Receivable_________
Inventory:__________
Total Current assets:_________-
Chapter 15 Solutions
EBK FOUNDATIONS OF FINANCE
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Ch. 15 - Prob. 11RQCh. 15 - Prob. 12RQCh. 15 - Prob. 1SPCh. 15 - Prob. 2SPCh. 15 - Prob. 3SPCh. 15 - (Estimating the cost of bank credit) Paymaster...Ch. 15 - (Cost of short-term financing) The R. Morin...Ch. 15 - (Cost of secured short-term credit) The Marlow...Ch. 15 - (Cost of short-term financing) You plan to borrow...Ch. 15 - Prob. 8SPCh. 15 - (Cost of trade credit) Calculate the effective...Ch. 15 - (Annual percentage yield) Compute the cost of the...Ch. 15 - Prob. 11SPCh. 15 - (Cost of accounts receivable) The Michelin...Ch. 15 - (Cost of accounts receivable) The Michelin...Ch. 15 - (Cost of factoring) MDM, Inc. is considering...Ch. 15 - (Cost of factoring) A factor has agreed to lend...Ch. 15 - Prob. 16SPCh. 15 - Prob. 17SP
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