\begin{tabular}{lll} \hline & Beginning & Ending \\ \hline Current assets & & \\ Cash & $6,500 & $12,500 \\ Accounts receivable & 12,500 & 10,000 \\ Inventory & 9,750 & 8,500 \\ Current liabilities & & \\ Accounts payable & $12,000 & $12,250 \\ Notes payable & 8,000 & 9,000 \\ Accruals & 0 & 0 \end{tabular} During the wake of the financial crisis, Ben Bernanke, chairman of tre Federal Reserve, said that "shortening the cash cycle and better use of working capital" are the most important factors as private-sector businesses struggie to overcome the current economic volatility and difficuity in accessing capital markets (18M Global Business Services, "Managing Working Capital in the New Economic Environment, hittp://www935.ibm.com/services/uk/bcs/pdt/working_capital_paper.pdr). Given the importance of working capital management, consider the case of Speedy Duck. Motor Company and both the amount of working capital that it is using being used in the firm and explore the prospects of how its working copital will be financed. Speedy Duck Motor Company reported the following results for current assets and tiabilties on its most recent balance sheets, Interestingly, the compary's sales did not change-it reported seles of $27,750 for its most recent year as well as for last year. the previous year: Using the information given and a 365 -day vear, calcuiate days of working capital, net working capital, and net operating working capitel for Speedy Duck Moter. Use your calculations to complete the following statements, and round your numericat feaponser to the decimat pisces: - Speedy Duck's days or working copital improved from days in the previous year to days at the end of then most recent year. - The campany's net working captal increased from 58,750.00 in the provious year to ot the end of last year. - Speedy Duck's net operating woeking capital increased from in the previous year to $18,750.00 at the end of last year Consider the following statement: Assuming that other things remain constant, if speedy Duck has very, very low working capitai face, it implies thot the company has no business risk. Balied on your understanding of Speedy Duck Motor's working capital, operating assets, and nonoperating assets, is this statement true or fabse? This stafement is true. This storemenc is raise: Using the information given and a 365 -day vear, calcuiate days of working capital, net working capital, and net operating working capitel for Speedy Duck Moter. Use your calculations to complete the following statements, and round your numericat feaponser to the decimat pisces: - Speedy Duck's days or working copital improved from days in the previous year to days at the end of then most recent year. - The campany's net working captal increased from 58,750.00 in the provious year to ot the end of last year. - Speedy Duck's net operating woeking capital increased from in the previous year to $18,750.00 at the end of last year Consider the following statement: Assuming that other things remain constant, if speedy Duck has very, very low working capitai face, it implies thot the company has no business risk. Balied on your understanding of Speedy Duck Motor's working capital, operating assets, and nonoperating assets, is this statement true or fabse? This stafement is true. This storemenc is raise
