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please help with parts A-D... will upvote quickly Net income 9. [Cash Conversion Cycle) Castillo Products Company, described below, improved its operations from net loss
please help with parts A-D... will upvote quickly
Net income 9. [Cash Conversion Cycle) Castillo Products Company, described below, improved its operations from net loss in 2015 to a net profit in 2016. While the founders, Cindy and Rob Castillo, are happy about these developments, they are concerned about how long the firm took to complete its cash conversion cycle in 2016. Use the following financial statements to make your calculations. Balance sheet items should reflect the averages of the 2015 and 2016 accounts. A. Calculate the inventory-to-sale conversion period for 2016. B. Calculate the sale-to-cash conversion period for 2016. C. Calculate the purchase-to-payment conversion period for 2016. D. Determine the length of Castillo Products' cash conversion cycle for 2016. CASTILLO PRODUCTS COMPANY INCOME STATEMENT 2015 2016 Net sales Cost of goods sold Gross profit Marketing General and administrative Depreciation EBIT Interest Earnings before taxes Income taxes Net income (loss) $900,000 540,000 360,000 90,000 250,000 40,000 -20.000 45,000 -65,000 $1,500,000 900,000 600,000 150,000 250,000 40,000 160,000 60,000 100,000 25,000 $ 75,000 -$65,000 2016 MUNICH EXPORTS CORPORATION BALANCE SHEET 2015 Cash $ 50,000 Accounts receivable 200,000 Inventories 450,000 Total current assets 700,000 Fixed assets, net 300,000 Total assets $1,000,000 $ 50,000 300,000 570,000 920,000 380,000 $1,300,000
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