Safety-First, Inc., makes portable ladders that can be used to exit second-floor levels of homes in the event of fire. Each ladder consists of fire resistant rope and high-strength plastic steps. A lightweight fire-resistant cape with a smoke filter is included with the Safety-First ladder. Each ladder and cape, when not in use, is rolled up and stored in a pouch the size of a backpack and can easily be taken on trips and vacations.
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.

SAFETY-FIRST, INC. INCOME STATEMENTS (IN $ THOUSANDS) 2009 $3,750 1,500 2010 $4,500 2,700 1,800 860 Net sales Cost of goods sold Gross profit Operating expenses Interest Income before taxes Income taxes Net income 900 300 600 BALANCE SHEETS (IN $ THOUSANDS) 2009 2010 Cash Accounts receivable Inventories Total current assets Gross fixed assets S 400 S 150 1.450 2,350 2000 950 2,000 2,950 2,800 -1,250 1,550 Less accumulated depreciation Net fixed assets Total assets 2010 Accounts payable Bank loan Accrued liabilities Total current liabilities Long-tem debt Common stock Retained eamings 2009 S 300 150 100 550 150 850 1,850 S 400 150 150 1,100 2,450 Total liabilities and equity