Short Case Study

-The following company has the following data:

Net sales revenue 120,000 Cost of goods sold 70,000

Beginning inventory 25,000 Ending inventory 18,0000 Account receivables 6,500 Account payables 10,500

Accordingly, calculate the Cash Gap and illustrate: 1) If the suppliers need to be paid after 40 days, is the company need a source of finance? If yes, the facilities needed to cover how many days?

2) How the company can cover the Gap?

3) What is the point of strength and weakness in the company operating cycle?