$[$Cash Conversion Cycle$]$ 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 that 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.