Fundamentals of Corp. Fin. (Looseleaf)(Custom)
15th Edition
ISBN: 9781269945646
Author: Berk
Publisher: PEARSON
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Textbook Question
Chapter 19, Problem 6P
The Greek Connection had sales of $32 million in 2015, and a cost of goods sold of $20 million. A simplified balance sheet for the firm appears below:
a. Calculate The Greek Connection’s net working capital in 2015.
b. Calculate the cash conversion cycle of The Greek Connection in 2015.
c. The industry average accounts receivable days is 30 days. What would have been the cash conversion cycle for The Greek Connection in 2015 had it matched the industry average for accounts receivable days (see MyFinanceLab for the data in Excel format)?
The Greek Connection
Balance Sheet as of December 31, 2015
(thousands of dollars)
| Assets | |||
| Cash | $2,000 | Accounts payable | $1,500 |
| Accounts receivable | 3,950 | Notes payable | 1,000 |
| Inventory | 1,300 | Accruals | 1,220 |
| Total current assets | $7,250 | Total current liabilities | $3,720 |
| Net plant, property, and equipment | 8,500 | Long-term debt | $3,000 |
| Total liabilities | $6,720 | ||
| Total assets | $15,750 | Common equity | $9,030 |
| Total liabilities and equity | $15,750 |
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The Greek Connection had sales of
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a. Calculate The Greek Connection's net working capital in 2013.
b. Calculate the cash conversion cycle of The Greek Connection in 2013.
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Chapter 19 Solutions
Fundamentals of Corp. Fin. (Looseleaf)(Custom)
Ch. 19 - Prob. 1CCCh. 19 - Prob. 2CCCh. 19 - Prob. 3CCCh. 19 - Prob. 4CCCh. 19 - Prob. 5CCCh. 19 - Prob. 6CCCh. 19 - Prob. 7CCCh. 19 - Prob. 8CCCh. 19 - Prob. 9CCCh. 19 - Prob. 10CC
Ch. 19 - Prob. 11CCCh. 19 - Prob. 12CCCh. 19 - Prob. 1CTCh. 19 - Prob. 2CTCh. 19 - 3. Does an increase in a firm’s cash cycle...Ch. 19 - Prob. 4CTCh. 19 - Prob. 5CTCh. 19 - Prob. 6CTCh. 19 - Prob. 7CTCh. 19 - Prob. 8CTCh. 19 - Prob. 9CTCh. 19 - Prob. 10CTCh. 19 - Which of the following short-term securities would...Ch. 19 - Prob. 1DCCh. 19 - Prob. 2DCCh. 19 - Prob. 3DCCh. 19 - Prob. 4DCCh. 19 - Prob. 5DCCh. 19 - Prob. 6DCCh. 19 - Prob. 7DCCh. 19 - Prob. 8DCCh. 19 - Prob. 1PCh. 19 - Prob. 2PCh. 19 - Prob. 3PCh. 19 - Prob. 4PCh. 19 - Prob. 5PCh. 19 - The Greek Connection had sales of $32 million in...Ch. 19 - Assume the credit terms offered to your firm by...Ch. 19 - Prob. 8PCh. 19 - Prob. 9PCh. 19 - Prob. 10PCh. 19 - Prob. 11PCh. 19 - Prob. 12PCh. 19 - Prob. 13PCh. 19 - Prob. 14PCh. 19 - Use the financial statements supplied below and on...Ch. 19 - Prob. 16PCh. 19 - Prob. 17P
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