Description of operating cycle

Assignment Help Managerial Accounting

Reference no: EM1350045

The Garcia Industries balance sheet and income statement for the year 2006 are as follows:
Assets Liabilities and Stockholder's Equity
Cash $6.0 Account payable $10.0
Account receivables $14.0 Salaries, benefits, and payroll
taxes payable $2.0
Inventories $12.0 Othe current liabilities $10.0
Fixed assets, net $40.0 Long-term debt $38.0

$72 Stockholder's equity $72.0

*The average inventory over the past 2 years also equals $12.0 million.

Income statement(in million of dollars)
Net sales $100.0
Cost of Sales $60.0
Selling general and administrative expenses $20.0
Other expenses $15.0
Net income $5.0

a- Determine the length of the inventory conversion period.
b- Determine the length of the receivables conversion period.
c- Determine the length of the operating cycle.
d- Determine the length of the payables deferral period.
e- Determine the length of the cash conversion cycle.
f- What is the meaning of the number you calculated in (e)?

Reference no: EM1350045

Questions Cloud

Explain patient automony : Explain patient automony. Are all individuals considered autonomous Do people have a moral right to refuse medical care

What is the intensity of the final transmitted light : How fast (in ) must a centrifuge rotate if a particle 5.4 from the axis of rotation is to experience the acceleration of 300000 's.

Agency conflict and agency costs : Define what is meant by the agency relationship, the agency conflict, and agency costs and idntify several examples of agency costs and discuss why agents might impose such costs on their principles.

Determine percentage return the individual earned : Mutual fund's net asset is $50, but the amount charges, but the amount charges an exit fee of one percent of net asset value and a load fee of 4 percent of net asset value.

Description of operating cycle : Determine the length of the inventory conversion period. Determine the length of the receivables conversion period. Determine the length of the operating cycle. Determine the length of the payables deferral period.

Conflict a healthy and important part of organisational life : Organisational Behaviour-Conflict is a healthy and important part of organisational life

Create logic for program to enter each household size : Create logic for a program that allows a user to enter each household size and find out the mean and median household size in Marengo.

Heuristic and anchoring heuristic : Briefly explain the representativeness heuristic and anchoring heuristic. Then describe one example from work, home, or a social setting when the heuristic can be useful and helpful, and one example of when it is not helpful, and why.

Determine the maximum price of stock : As an shareholder you have a required rate of return of 14% for investments in risky stocks. You have analyzed three risky firms and must decide which to purchase.

User Account

All Pages