Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
The balance sheet and income statement for Cruise Corporation are as follows:
Balance Sheet as of December 31, 2020
ASSETS LIABILITIES & EQUITY
Cash & marketable securities $2,000 Accounts payable $30,000
Accounts Receivable 35,000 Taxes payable 9,000
Inventory 15,000 Short-term borrowings 12,000
Total current assets $52,000 Total current liabilities $51,000
Net P,P & E $448,000 Long-term debt $200,000
TOTAL ASSETS $500,000 Total liabilities $251,000
Common stock at par $80,000
Additional paid-in capital $30,000
Retained earnings $139,000
TOTAL LIABILITIES & EQUITY $500,000
Income Statement for the year ending December 31, 2020
Sales $800,000
Cost of goods sold 560,000
Gross profit $240,000
S, G & A 100,000
Operating profit $140,000
Interest expense 11,660
Earnings b4 tax $128,340
Income tax 39,785
Net Income $88,555
Cruiseʹs stock was selling for $7 a share at the end of 2020, and there were 95 thousand shares outstanding. Cruise paid dividends of $0.05 a share in 2020 . Calculate Cruiseʹs Cash Conversion Cycle for 2020.
Balance Sheet as of December 31, 2020
ASSETS LIABILITIES & EQUITY
Cash & marketable securities $2,000 Accounts payable $30,000
Accounts Receivable 35,000 Taxes payable 9,000
Inventory 15,000 Short-term borrowings 12,000
Total current assets $52,000 Total current liabilities $51,000
Net P,P & E $448,000 Long-term debt $200,000
TOTAL ASSETS $500,000 Total liabilities $251,000
Common stock at par $80,000
Additional paid-in capital $30,000
TOTAL LIABILITIES & EQUITY $500,000
Income Statement for the year ending December 31, 2020
Sales $800,000
Cost of goods sold 560,000
Gross profit $240,000
S, G & A 100,000
Operating profit $140,000
Interest expense 11,660
Earnings b4 tax $128,340
Income tax 39,785
Net Income $88,555
Cruiseʹs stock was selling for $7 a share at the end of 2020, and there were 95 thousand shares outstanding. Cruise paid dividends of $0.05 a share in 2020 . Calculate Cruiseʹs Cash Conversion Cycle for 2020.
Group of answer choices
26 days
6 days
-4 days
45 days
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education