Income Statement (2017) Balance Sheet (2017) Credit Sales 1,500 Cash ? Accounts-Payable Cost of Goods Sold 1,200 Accounts Receivable Short-Term Debt 125 Taxable Income 300 Inventory Long Term Debt 845 Taxes (34%) 102 Fixed Assets 2,092 Common Stock 845 Net Income 198 Retained Earnings 1,132 Total Total Dividend (33.33%) 66 Retained Earnings 132
Main assumptions:
• Sales has increased by 25% in 2017
• "Cost of good sold" is 80% of sales in the income statement at all times. All other items are independent of sales.
• Each current asset and acoounts payable are fractions of sales in the
• Current ratio is 3, accounts receivable turnover is 2, inventory turnover is 4, accounts payable turnover 5 at all times. Turnovers are calculated with rescpect to the current period balances without averaging with pays year balances.
• Throughout the year 2017:
-the company raised funds through short-term debt first.
- the company raised the remaining funds through 50% long-term debt and 50% equity offering (common stock).
Consider the following financial statements (in millions of TL). In 2016, the company did not pay any dividends. What is the cash conversion cycle in year 2017? (1 year = 360 days)
A) 18 days
B) 198 days
C) 162 days
D) 342 days
E) other
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