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EBK CONTEMPORARY FINANCIAL MANAGEMENT

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 12P

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Question

Given the following data calculate DEF's operating cycle and cash conversion cycle.

DEF had the following current assets and liabilities for
2016, with sales of $1,500,000 and cost of goods sold
were 60% of sales. Given the following data calculate
DEF's Operating cycle and cash conversion cycle.
ASSETS LIABILITIES & OWNER'S EQUITY
Cash
$75,000
Accounts Payable
$350,000
Accounts Receivable
$375,000
Loan
$125,000
Inventory
$400,000
Accruals
$250,000
Total Current Assets
$850,000
Owner's Equity
$125,000
Total Current Liab. & Owner's Equity $850,000

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