Problem 26-4
The Greek Connection had sales of $32 million in 2009, and a cost of goods sold of $20 million. A simplified balance sheet for the firm appears below:
	THE GREEK CONNECTION
	Balance Sheet
	As of December 31, 2009
	(000)
	Assets			Liabilities and Equity
	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			Long-term debt	$3,000
	and equipment	$8,500		Total liabilities	$6,720
	Total Assets	$15,750		Common equity	9,030
				Total liabilities and equity	$15,750
a.	Calculate The Greek Connections net working capital in 2009.
b.	Calculate the cash conversion cycle of The Greek Connection in 2009.
c.	The industry average days sales outstanding ratio is 30 days. What would the cash conversion cycle for The Greek Connection have been in 2009 had it matched the industry average days sales outstanding?
	Sales (000)	$32,000		Days in a year	365
	Cost of Goods Sold (000)	$20,000
a.	Calculate The Greek Connections net working capital in 2009.
	Net working capital (000)
b.	Calculate the cash conversion cycle of The Greek Connection in 2009.
	Accounts receivable days
	Inventory days
	Accounts payable days
	Cash conversion cycle (days)
c.	The industry average days sales outstanding ratio is 30 days. What would the cash conversion cycle for The Greek Connection have been in 2009 had it matched the industry average days sales outstanding?
	Industry accounts receivable days	30
	Cash conversion cycle (days)