Look back in the chapter to Table 14.1, which showed the balance sheets for Unilate Textiles on three different dates. Assume all sales and all purchases are made on credit. Calculate the length of Unilate?s cash conversion cycle on September 30, 2017 and December 31, 2017.

Table 14-1

Transcribed Image Text:

Unilate Textiles: Historical and Projected Financials ($ million) 12/31/16 9/30/17 12/31/17 Historical Projected Projected 1. Balance Sheets Cash $ 15.0 $ 30.0 $ 16.5 Accounts receivable 180.0 251.5 198.0 Inventories 270.0 410.0 297.0 Total current assets (CA) $465.0 $ 691.5 $511.5 Net plant and equipment 380.0 408.5 418.0 Total Assets $845.0 $ 1,100.0 $929.5 Accounts payable $ 30.0 $ 90.0 $33.0 66.0 Accruals 60.0 100.0 Notes payable 40.0 129.0 46.8 Total current liabilities (CL) $130.0 $ 319.0 $145.8 Long-term bonds 300.0 309.0 309.0 Total liabilities $430.0 $ 628.0 $454.8 Common stock 130.0 159.3 159.3 Retained eamings 285.0 312.7 315.5 Total owners' equity Total Liabilities and Equity $ 472.0 $ 1,100.0 $415.0 $474.8 $845.0 $929.5 Net working capital = CA – CL $335.0 $ 372.5 $365.7 Current ratio = CA/CL 3.6х 2.2x 3.6х 2016 2017 II. Partial Income Statements Sales $1,500.0 $1,650.0 Cost of goods sold (1,230.0) (1,353.0) Fixed costs ( 140.0) $ 130.0 ( 154.0) $ 143.0 Earnings before interest and taxes "Rounding difference.