The following is known for a company:

Assets ($, millions)

Cash 15

Accounts Receivable 5

Inventory 10

Net Fixed Assets 110

Liabilities

Short term debt 20

Long term debt 50

Accounts payable 6

Using the above information, complete the Managerial Balance sheet:

Invested Capital	Capital Employed
Cash:	Short Term Debt:
Working Capital Requirement:	Long Term Debt:
Net Fixed Assets:	Shareholder Equity:

Credit above is given for the numbers for working capital requirement and shareholder equity only.

The following selected data is available for four US firms:

Millions $	Firm 1	Firm 2	Firm 3	Firm 4
Revenue	475	3,200	25,000	176,000
Accounts Receiveable	82	163	5,493	2,707
Inventory	250	100	3,700	18,000
Accounts Payable	46	1,199	6,214	20,395

Complete the following table using the data above but report only the WCR for Firm 1, the collection period in days for Firm 2 and the Inventory turnover for Frim 4:

	Firm 1	Firm 2	Firm 3	Firm 4
WCR
WCR/Sales
Collection Period, Day
Inventory turnover

It is best to have a high inventory turnover ?

True False

It is best to have a short collection period than a long one?

True False

It is better to have a negative WCR than a positive WCR ?

True False

Answers

1

Working capital requirement: ???

Shareholder equity: ???

2 Answers from your completed table

WCR for Firm 1: ???

Collection Period, days Firm 2: ???

Inventory turnover for Firm 4: ???

2A True or False ?

2B True or False ?

2C True or False ?