You have been provided with financials for a company in car manufacturing sector for the year ending 31 December as follows Property Plant and Equipment 2023 172 000 2022 162 000 Current assets: Cash Marketable securities Accounts Receivable Inventory Prepaid expenses Total assets Equity and Liabilities Current Liabilities Accounts payable Accrued expenses 1 600 900 24 000 1 400 600 22 000 40 000 34 000 500 600 67 000 58 600 240 000 221 700 140 000 125 600 15 000 14 100 4 400 4 200 Notes payable 6.000 6 400 25 400 24 700 Long term liabilities Bonds payable (Face value = P1000.00) 74 600 71 400 Total equity and liabilities 240 000 221 700 Extracts from the income statements Revenue Opening inventory Purchases Closing inventory Cost of sales 100 000 146 000 34 000 30 000 94 000 132 000 (40000) (88 000) (34 000) (128 000) 12000 18.000 Required a) Calculate the cash conversion cycle (CCC) for each of the two years. Interpret the meaning of each component of the CCC in each year and then discuss reasons for the notable changes across the two financial years. (19 marks) b) Discuss factors that can help to shorten the CCC. Your answer should give reference to any two of the main components that make up the CCC you calculated above. (6 marks)

You have been provided with financials for a company in car manufacturing sector for the year ending 31 December as follows Property Plant and Equipment 2023 172 000 2022 162 000 Current assets: Cash Marketable securities Accounts Receivable Inventory Prepaid expenses Total assets Equity and Liabilities Current Liabilities Accounts payable Accrued expenses 1 600 900 24 000 1 400 600 22 000 40 000 34 000 500 600 67 000 58 600 240 000 221 700 140 000 125 600 15 000 14 100 4 400 4 200 Notes payable 6.000 6 400 25 400 24 700 Long term liabilities Bonds payable (Face value = P1000.00) 74 600 71 400 Total equity and liabilities 240 000 221 700 Extracts from the income statements Revenue Opening inventory Purchases Closing inventory Cost of sales 100 000 146 000 34 000 30 000 94 000 132 000 (40000) (88 000) (34 000) (128 000) 12000 18.000 Required a) Calculate the cash conversion cycle (CCC) for each of the two years. Interpret the meaning of each component of the CCC in each year and then discuss reasons for the notable changes across the two financial years. (19 marks) b) Discuss factors that can help to shorten the CCC. Your answer should give reference to any two of the main components that make up the CCC you calculated above. (6 marks)

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 9.4.10P: Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of...

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The comparative balance sheets for 2021 and 2020 and the income statement for 2021 are given below for Arduous Company. Additional information from Arduous’s accounting records is provided also. ARDUOUS COMPANYComparative Balance SheetsDecember 31, 2021 and 2020($ in millions) 2021 2020 Assets Cash $ 142 $ 100 Accounts receivable 209 232 Investment revenue receivable 25 23 Inventory 226 219 Prepaid insurance 23 32 Long-term investment 213 144 Land 235 169 Buildings and equipment 437 438 Less: Accumulated depreciation (117 ) (158 ) Patent 53 56 $ 1,446 $ 1,255 Liabilities Accounts payable $ 69 $ 103 Salaries payable 25 37 Interest payable (bonds) 27 23 Income tax payable 31 38 Deferred tax liability 49 27 Notes payable 33 0…
Sales. Costs and expenses Cost of goods sold. Operating expenses. Interest expense... Income before income taxes. Income tax expense.. Net income.. Statement of Income For the Year Ended December 31, 2020 $1,140,000 $1,700,000 364,800 37,800 1,542,600 157,400 55,090 $ 102,310 GEORGE INDUSTRIES Statement of Financial Position December 31, 2020 Total assets. Total liabilities.. Total shareholders' equity... 2020 2019 $842,110 $717,800 329,600 279,600 512,510 438,200 Calculate the Net profit margin ratio (use up to 2 decimal places and do not use a % sign)
Prepare the income statements and balance sheets for years 2018 and 2019 for Thompson Company using the following information. The balance sheet numbers are at the end of year figures.Item20182019Accounts Payable120.0150.0Accounts Receivable150.0180.0Accumulated Depreciation330.0360.0Cash & Cash Equivalents10.012.0Common Stock150.0200.0Cost of Goods Sold750.0850.0Depreciation25.030.0Interest Expense30.033.0Inventory200.0180.0Long-term Debt150.0150.0Gross Plant & Equipment650.0780.0Retained Earnings208.5225.0Sales1,500.01,700.0SG&A Expenses500.0570.0Notes Payable51.567.0Tax Rate21%21%(2) Answer the following questions:(a) How much did Thompson Company spend in acquiring fixed assets in 2019?(b) How much dividend did Thompson Company pay out during 2019?(c) Using the end of year numbers, did the long-term solvency ratios improve or deteriorate from 2018 to 2019? Answer this question using at least two long-term solvency ratios.(d) Using the end of year numbers, did the asset…
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Please provide complete and correct answer for both requirements and show all work like explanation , computation , formula with steps. Answer in text. Million thanks !
use the following information to make a Common size income statement
Comparitive balance sheet of Hillard Co. as of Dec 31, 2020 and 2021 is as under: Assets 2020 2021 Liabilities Cash Accounts Receivable Inventory Fixed Assets Investments Sales Cost of Goods Sold Gross profit 16,425 12,300 Salaries expenses Depreciation expense Income tax expense Admin. Expenses Net profit 16,100 163,000 13,500 221,325 28,025 10,600 Income statement for the year 2021 is as under: 18,400 206,300 9,200 272,525 829,400 614,450 214,950 12,900 11,600 1,150 164,400 24,900 Accounts Payable Salaries Payable Income tax payable Loans Payable Retained earnings Please prepare the cash flow statement using the indirect method. 2020 26,900 2,400 1,600 106,250 84,175 221,325 2021 33,450 3,100 2,050 113,250 120,675 272,525
Selected comparative financial statements of Korbin Company follow. KORBIN COMPANY Comparative Income Statements For Years Ended December 31 Sales. Cost of goods sold Gross profit Selling expenses Administrative expenses Total expenses Income before taxes Income tax expense Net income Assets Current assets Long-term investments. Plant assets, net Total assets KORBIN COMPANY Comparative Balance Sheets Liabilities and Equity Current liabilities. 2021 2020 2019 $ 483,981 $ 370,769 $ 257,300 291,357 234,326 164,672 192,624 136,443 92,628 68,725 51,166 43,558 32,628 112,283 83,794 80,341 52,649 14,943 10,793 $ 65,398 $ 41,856 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total expenses Income before taxes Income tax expense Net income Common stock Other paid-in capital Retained earnings Total liabilities and equity December 31 2021 S % $ 57,843 0 KORBIN COMPANY Common-Size Comparative Income Statements For Years Ended December 31, 2021, 2020, and 2019 2021…
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