Question

The income statement and end-of-year balance sheet of Altar Inc., a distribution company, are as follows:
Income Statement
Net sales................. $2,000,000
Cost of goods sold............ 1,300,000
Selling, general, and administrative expenses.... 300,000
Depreciation expense........... 100,000
Earnings before interest and tax........ 300,000
Net interest expense............ 20,000
Earnings before tax............ 280,000
Income tax expense............. 50,000
Earnings after tax........... $ 230,000
Balance Sheet
Cash................. $ 100,000
Accounts receivable............ 500,000
Inventories1 ............. 400,000
Other current assets ........... 300,000
Noncurrent assets............ 500,000
Total assets .............. $1,800,000
Short-term debt.............. $ 100,000
Accounts payable........... 600,000
Accrued expenses............ 400,000
Long-term debt.............. 300,000
Owners’ equity.............. 400,000
Total liabilities and owners’ equity....... $1,800,000
What is the cash-to-cash conversion period of Altar Inc. at the end of the year?


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  • CreatedMarch 27, 2015
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