Use the financial statements supplied below for International Motor Corporation (IMC) to answer the following questions. 

a. Calculate the cash conversion cycle for IMC for both 2013 and 2014. What change has occurred, if any? All else equal, how does this change affect IMC’s need for cash?

b. IMC’s suppliers offer terms of net 30. Does it appear that IMC is doing a good job of managing its accounts payable?                    

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2013 2014 $75,000 $60,000 Sales Cost of goods sold 52,000 61,000 $ 8000 Gross profit $14,000 6000 Selling, general, and administrative expenses 8000 $ 2000 $ 6000 Operating profit Interest expense 1400 1300 $ 4700 $ 600 Earnings before tax Taxes 300 2350 $ 300 $ 2350 Earnings after tax 2013 2014 2013 2014 Assets Liabilities $ 6100 Accounts payable 6900 Notes payable Cash $ 3080 $ 3600 $ 4600 Accounts receivable 2800 1180 1250 Inventory 6200 6600 Accruals 5600 6211 Total current assets $12,080 $19,600 Total current liabilities $10,380 $12,061 $ 6500 $ 7000 Net plant, property, and equipment Long-term debt $23,087 $20,098 Total liabilities $16,880 $19,061 $35,167 $39,698 Total assets Equity $ 2735 $ 2735 $15,552 $17,902 Common stock Retained earnings Total equity $18,287 $20,637 Total liabilities and equity $35,167 $39,698