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?

Income Statements (in thousands) Six Months to June 30, 2009 10,655 Six Months to December 31, 2009 S 13,851 11,671 Six Months to June 30, 2010 Nct sales Cost of goods sold Selling, general, and administrative expenses Depreciation expense Interest expense Income tax expense Earnings after tax Dividends S 11,720 9,834 1,677 76 70 26 37 S 1 8,940 1,554 1,925 62 23 32 90 Balance Sheets (in thousands) June 30, 2009 December 31, 2009 S 60 2,616 2,694 June 30, 2010 Cash Accounts receivable Inventories Prepaid expenses Net fixed assets Total assets Short-term debt Accounts payable Accrued expenses Long-term debt Owners' equity Total liabilities and owners' equity $ 160 1,953 1,986 80 733 S 4,912 50 1,450 98 800 2,514 S 4,912 818 $ 6,230 $ 880 1,950 114 750 2,536 S 6,230 $ 70 2,100 2,085 25 830 S 5,110 S 50 1,650 138 700 2,572 $5,110