Given Robinson's 2010 and 2011 financial information presented in problems 2 and 4. a) Compute its operating
Question:
Given Robinson's 2010 and 2011 financial information presented in problems 2 and 4.
a) Compute its operating and cash conversion cycle in each year.
b) What was Robinson's net investment in working capital each year? The Robinson Company has the following current assets and current liabilities for these two years:
2010 2011
Cash & marketable securities...... $ 50,000 $ 50,000
Accounts receivable......... 300,000 350,000
Inventories.............. 350,000 500,000
Total current assets.......... $700,000 $900,000
Accounts payable.......... $200,000 $250,000
Bank loan............. 0 150,000
Accruals............... 150,000 200,000
Total Current Liabilities......... 350,000 600,000
Cash conversion cycle measures the total time a business takes to convert its cash on hand to produce, pay its suppliers, sell to its customers and collect cash from its customers. The process starts with purchasing of raw materials from suppliers,...
Step by Step Answer:
a Inventory Turnover Ratio Cost of goods sold Inventory Particulars 2010 2011 Cost of goods sold 100...View the full answer
Interpreting and Analyzing Financial Statements
ISBN: 978-0132746243
6th edition
Authors: Karen P. Schoenebeck, Mark P. Holtzman
