The following are financial statements for the Genatron Manufacturing Corporation for the years 2016 and 2017:

Selected Balance Sheet Information

Selected Income Statement Information

Calculate Genatron’s operating cycle and cash conversion cycle for 2016 and 2017. Why did they change between these years?

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2016 2017 Cash $50,000 $40,000 Accounts receivable 200,000 260,000 Inventory 450,000 500,000 $700,000 Total current assets $800,000 Bank loan, 10% $90,000 $90,000 Accounts payable 130,000 170,000 Accruals 50,000 70,000 Total current liabilities $270,000 $330,000 Long-term debt, 12% 300,000 400,000 2016 2017 Net sales Cost of goods sold Gross profit Net income $1,300,000 $1,500,000 780,000 900,000 $520,000 $600,000 $93,000 $114,000