The Hopewell Pharmaceutical Company€™s balance sheet and income statement for last year are as follows:

*Assume that average accounts receivable are the same as ending accounts receivable.
**Assume that average inventory over the year was the same as ending inventory.
***Assume that average accounts payable are the same as ending accounts payable.
Income Statement (in Millions of Dollars)
Net sales ............... $6,500
Cost of sales ............... 1,500
Selling, general, and administrative expenses .. 2,500
Other expenses ............... 800
Total expenses ............... $4,800
Earnings before taxes ............ 1,700
Taxes .................. 680
Earnings after taxes (net income) ....... $1,020
a. Determine Hopewell€™s cash conversion cycle.
b. Give an interpretation of the value computed in parta.

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Balance Sheet (in Millions of Dollars) Assets Cash and marketable securities $1.100 Accounts payable Accounts receivable Inventories Other current assets lotal current assets Plant and equipment (net 2,300 Long-term debt and other Other assets Total assets Liabilities and Equity $900 ,300 Accrued liabilities 300 200 Other current liabilities 700 $1.900 800 (salaries and benefits) $3.400 Total current liabilities 1000 1,800 2000 Total stockholders' equity $3800 Total liabilities and equity $6.700 000 liabilities $6.700 Common stock Retained earnings