CHALLENGE Contemporary Financial Management R. Charles Moyer, James R. McG.. 10. The Hopewell Pharmaceutical Company's balance sheet and income statement for last year are as follows: Contemporary Financial Management Assets Balance Sheet (in Millions of Dollars) Liabilities and Equity $1,100 Accounts payable *** $900 Expand Collapse 1,300 800 300 Cash and marketable securities Accounts receivable Inventories** Other current assets Total current assets Plant and equipment (net) Other assets Total assets 700 16-14a Floating Liens 607 Accrued liabilities (salaries and benefits) Other current liabilities Total current liabilities Long-term debt and other - liabilities 200 $3,400 2.300 $1,900 16-14b Trust Receipts 607 1.000 1,000 $6,700 1.800 607 16-14c Terminal Warehouse and Field Warehouse Financing Arrangements Common stock Retained earnings Total stockholders' equity Total liabilities and equity 2,000 $3,800 $6.700 608 International Issues: Foreign Receivables Financing 16-15 Summary 609 Assume that average accounts receivable are the same as ending accounts receivable **Assume that everage inventory over the year was the same as ending inventory ***Assume that average accounts payable are the same as ending accounts payable, Income Statement (in Millions of Dollars) Net sales Cost of sales Selling, general, and administrative expenses Other expenses Total expenses Earnings before taxes Taxes Earnings after taxes (net income) $6,500 1,500 2,500 611 16-16 Questions and Topics for Discussion 800 16-17 Self-Test Problems 612 $4,800 $ 1,700 680 $1,020 16-18 Problems 614 a. Determine Hopewell's cash conversion cycle. b. Give an interpretation of the value computed in Part a