Uso the financial statements supplied here for the International Motor Corporation (IMC) to answer the following questions: a. Calculate the cash conversion cycle for IMC for both 2012 and 2013, What change has occurred, if any? All else being equal, how does this change affect IMC's need for cash? b. IMC's suppliers offer terms of net 30. Does it appear that IMC is doing a good job of managing its accounts payable? (Hint: use a 365-day year.) 2013 $75,000 61,000 $14,000 8,000 $6,000 1,300 $4,700 2,350 $2,350 INTERNATIONAL MOTOR CORPORATION INCOME STATEMENT (in millions) for the years ending December 31 2012 Sales $60,000 ( - ) Cost of goods sold 52,000 Gross profit $8,000 (-) Selling and general and administrative expenses 6,000 Operating profit $2,000 (-) Interest expense 1,400 Earnings before tax $600 (-) Taxes 300 Earnings after tax $300 INTERNATIONAL MOTOR CORPORATION BALANCE SHEET (in millions) as of December 31 2012 2013 2012 Assets Liabilities Cash $3,080 $6,100 Accounts payable $3,616 Accounts receivable 2,416 6,891 Notes payable 1,180 Inventory 5,804 6,577 Accruals 5,600 Total current assets $11,300 $19,568 Total current liabilities $10,396 Net plant, property, and $23,087 $20,098 Long-term debt $6,500 equip Total assets $34,387 $39,666 Total liabilities $16,896 Equity Common stock $1,939 Retained earnings $15,552 Total equity $17.491 Total liabilities and equity $34,387 2013 $4,624 1.250 6,211 $12,085 $7,000 $19,085 $2,679 $17.902 $20,581 $39.666 Calculate the cash conversion cycle for IMC for both 2012 and 2013 What change has occurred. If any? All else being equat, how does this change affect IMC need for cash? The cash conversion cycle (CCC) for 2012 is days. (Round to one decimal place.) The cash conversion cycle (CCC) for 2013 is days. (Round to one decimal place.) URZU PE 01 Use the financial statements supplied here for the International Motor Corporation (IMC) to answer the following questions a. Calculate the cash conversion cycle for IMC for both 2012 and 2013. What change has occurred if any? All else being equal, how does this change afect IMC's need for cash? b. IMC's suppliers offer terms of net 30. Does it appear that IMC is doing a good job of managing its accounts payable? (Hint use a 365-day year) What charge has occurred in the cash convention cycle, l'any? All else being equal, how does this charge atfect IMC's need for cash? Innllore noffer tormented in that IMC Click to select your answer(s) Chence thahenshaw The cash cycle has not changed The cash cycle has increased The cash cycle has decreased b. IMC's suppliers offer terms of net 30. Does it appear that IMC is doing a good job of managing its accounts payable?(Choose the be O A. The firm is paying too early; it could be earning interest on its money. OB. The firm is paying when it should be Cash b. IMC's suppliers offer terms of net 30. Does it appear that IMC is doing a good job of managing its accounts payable? (Hint: use a 365-dav vear) A. The firm is paying too early, it could be earning interest on its money. B. The firm is paying when it should be. OC. The firm should be paying within 10 days. OD. The firm should be paying after 30 days, if there is no penalty, to take advantage of additional cash on hand. Click to colant mour answers
