Question
The Greek Connection had sales of $33.3 million and a cost of goods sold of $13.3 million in 2018. A simplified balance sheet for the
The Greek Connection had sales of
$33.3
million and a cost of goods sold of
$13.3
million in
2018.
A simplified balance sheet for the firm appears below:a. Calculate The Greek Connection's net working capital in
2018.
b. Calculate the cash conversion cycle of The Greek Connection in
2018.
c. The industry average accounts receivable days is 30 days. What would have been the cash conversion cycle for The Greek Connection in
2018
had it met the industry average for accounts receivable days? (Hint: Use a 365-day year.)(Click on the following icon
in order to copy the contents of the table below into a spreadsheet.)
THE GREEK CONNECTION |
BALANCE SHEET as of December 31, 2018 (thousands of dollars) |
Assets | Liabilities and Equity | |||
Cash | $2,095 | Accounts payable | $1,745 | |
Accounts receivable | 4,228 | Notes payable | 1,000 | |
Inventory | 1,136 | Accruals | 1,220 | |
Total current assets | $7,459 | Total current liabilities | $3,965 | |
Net plant, property, and equipment | $8,500 | Long-term debt | $3,000 | |
Total assets | $15,959 | Total liabilities | $6,965 | |
Common equity | $8,994 | |||
Total liabilities and equity | $15,959 |
Question content area bottom
Part 1
a. Calculate The Greek Connection's net working capital in
2018.
The net working capital is
$enter your response here
thousand.(Round to the nearestinteger.)
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