Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
12th Edition
ISBN: 9781259144387
Author: Richard A Brealey, Stewart C Myers, Franklin Allen
Publisher: McGraw-Hill Education
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Question
Chapter 29, Problem 1PS
Summary Introduction
To determine: The cash cycle of company E.
Cash cycle is the overall circulation or cycle of cash commences from the payment of raw materials and ends with receipt of cash on goods sold.
Expert Solution & Answer
Explanation of Solution
Computation of cash cycle is as follows:
Therefore, the cash cycle of the company E is 137 days.
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Consider the financial statements
alongside the notes presented by Simple
Things Industries and prepare the
statement of cash flows for the year
ended December 31, 2014.
Assets
Current:
Cash
Accounts Receivable
Inventory
Plant assets, net
Total Assets
Liabilities
Current:
Accounts payable
Accrued liabilities
Long-term notes payable
Stockholders' Equity
Common S tock
Retained earnings
Treasury stock
Total liabilities and stockholders' equity
Revenues and gains:
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Interest revenue
Dividend revenue
Gain on sale of plant assets
Total revenues and gains
Simple Things Industries Ltd.
Comparative Balance Sheet
December 31, 2014 and 2013
Expenses
Cost of goods sold
Salary and wages expense
Depreciation expense
Other operating expense
Interest expense
Income tax expense
Total expenses
Net Income/(Loss)
Simple Things Industries Ltd
Income Statement
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Notes
Acquisition of plant asset during 2014
Sale proceeds from sale of plant asset
Receipt for issuance of…
How do I compute the operating cash flow to current liabilities ratio?
Calculate the net cash flow from financing activities for 2008.
The following selected account balances were taken from Buckeye Company's general ledger at January 1, 2008, and December 31, 2008:
January 1, 2008 December 31, 2008
Inventory 59,000 41,000
Accounts payable 52,000 71,000
Mortgage payable 120,000 95,000
Salaries payable 9,000 3,000
Investments 75,000 68,000
Accounts receivable 63,000 96,000
Land 58,000 88,000
Common stock 100,000 180,000
Retained earnings 22,000 34,000
The following information was taken from Buckeye Company's 2008 income statement:
Sales Revenue $420,000
Cost of goods sold 300,000
Salaries expense 88,000
Loss on sale of investments 6,000
Net income $26,000
Chapter 29 Solutions
Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 29 - Prob. 1PSCh. 29 - Prob. 2PSCh. 29 - Sources and uses of cash and working capital...Ch. 29 - Sources and uses of cash State whether each of the...Ch. 29 - Prob. 5PSCh. 29 - Forecasts of payables Dynamic Futon forecasts the...Ch. 29 - Prob. 8PSCh. 29 - Prob. 9PSCh. 29 - Prob. 10PSCh. 29 - Prob. 11PS
Ch. 29 - Cash cycle A firm is considering several policy...Ch. 29 - Prob. 13PSCh. 29 - Collections on receivables If a firm pays its...Ch. 29 - Short-term financial plans Which items in Table...Ch. 29 - Prob. 16PSCh. 29 - Short-term financial plans Work out a short-term...Ch. 29 - Prob. 18PSCh. 29 - Prob. 19PSCh. 29 - Long-term financial plans Corporate financial...Ch. 29 - Prob. 21PSCh. 29 - Long-term financial plans a. Use the Dynamic...Ch. 29 - Long-term plans The financial statements of Eagle...Ch. 29 - Forecast growth rate a. What is the internal...Ch. 29 - Forecast growth rate Bio-Plasma Corp. is growing...Ch. 29 - Long-term plans Table 29.19 shows the 2016...
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