Question $4$

Winter Limited is a small, family owned book company based in Dublin. It has asked you to review the extracts of the Financial Statements $($below$),$ focusing on the working capital position. Mr$.$ White is the Managing Director.

$\backslash$table$[[$Income Statment for the year ended $31$ December $2020,^(\text{'}000)],[,],[$Sales$,,3,616],[$Less: Cost of Sales$],[$Op ening Inventory,$1,000,],[$Purchases$,2,728,],[3,728,],[$Less: Closing Inventory,$(872),],[$Cost of Sales,,$2,856],[$Gross Profit,,$760],[$Less Expenses:,,$(490)],[$Profit for year,,$270],[$Statement of Financial Position,,$^(\text{'}000)],[$Non current assets$],[$Property$,$ plant and equipment,,$2,417],[$Current Assets$],[$Inventory$,872,],[$Accounts receivable,$600,],[,1,472],[$Total Assets,,$3,889],[$Equity and Liabilities:$],[$Ordinary Share Capital,$2,500,],[$Revenue reserves,$123,],[,2,623],[$Current Liabilities$],[$Accounts payable,$756,],[$Bank overdraft,$120,],[$Bank loan,$390,],[,1,266],[$Total Equity and Liabilities,,$3,889],[,,],[,,]]$

Required:

$($a$)$ Explain the significance to Mr$.$ White for the business of the cash conversion cycle and the three component parts of the cycle.

$($b$)$ Calculate the cash conversion cycle

$($c$)$ outline four feasible suggestions for Mr white of how the working capital position can be improved