Fundamentals of Corporate Finance (4th Edition) (Berk, DeMarzo & Harford, The Corporate Finance Series)
4th Edition
ISBN: 9780134475561
Author: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Publisher: PEARSON
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Textbook Question
Chapter 19, Problem 6P
The Greek Connection had sales of $32 million in 2015, and a cost of goods sold of $20 million. A simplified
a. Calculate The Greek Connection’s net working capital in 2015.
b. Calculate the cash conversion cycle of The Greek Connection in 2015.
c. The industry average accounts receivable days is 30 days. What would have been the cash conversion cycle for The Greek Connection in 2015 had it matched the industry average for accounts receivable days (see MyFinanceLab for the data in Excel format)?
The Greek Connection
Balance Sheet as of December 31, 2015
(thousands of dollars)
| Assets | |||
| Cash | $2,000 | Accounts payable | $1,500 |
| Accounts receivable | 3,950 | Notes payable | 1,000 |
| Inventory | 1,300 | Accruals | 1,220 |
| Total current assets | $7,250 | Total current liabilities | $3,720 |
| Net plant, property, and equipment | 8,500 | Long-term debt | $3,000 |
| Total liabilities | $6,720 | ||
| Total assets | $15,750 | Common equity | $9,030 |
| Total liabilities and equity | $15,750 |
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Chapter 19 Solutions
Fundamentals of Corporate Finance (4th Edition) (Berk, DeMarzo & Harford, The Corporate Finance Series)
Ch. 19 - Prob. 1CCCh. 19 - Prob. 2CCCh. 19 - Prob. 3CCCh. 19 - Prob. 4CCCh. 19 - Prob. 5CCCh. 19 - Prob. 6CCCh. 19 - Prob. 7CCCh. 19 - Prob. 8CCCh. 19 - Prob. 9CCCh. 19 - Prob. 10CC
Ch. 19 - Prob. 11CCCh. 19 - Prob. 12CCCh. 19 - Prob. 1CTCh. 19 - Prob. 2CTCh. 19 - 3. Does an increase in a firm’s cash cycle...Ch. 19 - Prob. 4CTCh. 19 - Prob. 5CTCh. 19 - Prob. 6CTCh. 19 - Prob. 7CTCh. 19 - Prob. 8CTCh. 19 - Prob. 9CTCh. 19 - Prob. 10CTCh. 19 - Which of the following short-term securities would...Ch. 19 - Prob. 1DCCh. 19 - Prob. 2DCCh. 19 - Prob. 3DCCh. 19 - Prob. 4DCCh. 19 - Prob. 5DCCh. 19 - Prob. 6DCCh. 19 - Prob. 7DCCh. 19 - Prob. 1PCh. 19 - Prob. 2PCh. 19 - Prob. 3PCh. 19 - Prob. 4PCh. 19 - Prob. 5PCh. 19 - The Greek Connection had sales of $32 million in...Ch. 19 - Assume the credit terms offered to your firm by...Ch. 19 - Prob. 8PCh. 19 - Prob. 9PCh. 19 - Prob. 10PCh. 19 - Prob. 11PCh. 19 - Prob. 12PCh. 19 - Prob. 13PCh. 19 - Prob. 14PCh. 19 - Use the financial statements supplied below and on...Ch. 19 - Prob. 16PCh. 19 - Prob. 17P
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