Mars Electronics is a distributor for the Global Electric Company
Mars Electronics is a distributor for the Global Electric Company (GEC), a large manufacturer of electrical and electronics products for consumer and institutional markets. Below are the semiannual financial statements of the company for the last year and a half.
a. Compute Mars Electronics’ working capital requirement on June 30, 2009, December 31, 2009, and June 30, 2010. Also, compute the collection period, inventory turnover, and payment period at the same dates. (The average payment period on June 30, 2009, was twenty-nine days.)
b. Prepare Mars Electronics’ managerial balance sheet on June 30, 2009,
December 31, 2009, and June 30, 2010.
c. Compute Mars Electronics’ net long-term financing and net short-term financing on June 30, 2009, December 31, 2009, and June 30, 2010. Comment on Mars Electronics’ financing strategy. Is it a conservative one? Aggressive? Matching one?
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