Safety-First, Inc., makes portable ladders that can be used to exit second-floor levels of homes in the
Question:
Jan Smithson founded Safety-First after graduating from a private liberal arts college in the Northwest three years ago. After struggling for the first year, the venture seemed to be growing and producing profits. Following are the two most recent years of financial statements, expressed in thousands of dollars, for Safety-First, Inc.
A. Using year-end data, calculate the inventory-to-sale conversion period, the saleto- cash conversion period, and the purchase-to-payment conversion period for 2007 and 2008.
B. Determine the cash conversion cycle for each year and discuss the changes that took place, ifany.
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,...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Entrepreneurial Finance
ISBN: 978-0538478151
4th edition
Authors: J . chris leach, Ronald w. melicher
Question Posted: