Question: Hi, can you help me answer this with a simple explanation of the answer, if possible. Thank you information for Q1 to Q3: Consider the
Hi, can you help me answer this with a simple explanation of the answer, if possible. Thank you
information for Q1 to Q3: Consider the 2012 financial results (in millions of dollars) for the two companies below. (Assume 50 weeks in a year)
| Measure | ABC Corp | XYZ Corp |
| Sales Revenue | 150 | 25 |
| Cost of Goods Sold | 100 | 15 |
| Gross Profit | 50 | 10 |
| Other Expenses | 48 | 6 |
| Net Income | 2 | 4 |
| Net Receivables | 15 | 5 |
| Inventories | 20 | 3 |
| Property, Plant, and Equipment | 20 | 5 |
| Other Assets | 35 | 7 |
| Total Assets | 80 | 20 |
| Accounts Payable | 40 | 3 |
| Other Liabilities | 20 | 5 |
| Total Liabilities | 60 | 8 |
| Stockholder Equity | 20 | 12 |
1- The Cash-to-Cash Cycle (C2C) for ABC Corp. would be:
A) +5 weeks
B) +10 weeks
C) -5 weeks
D) -10 weeks
2- The Cash-to-Cash Cycle (C2C) for XYZ Corp. would be:
A) +5 weeks
B) +10 weeks
C) -5 weeks
D) -10 weeks
E) -10 weeks
3-The company is performing better in terms of the Cash-to-Cash Cycle (C2C)?
A) ABC Corp.
B) XYZ Corp.
C) The two companies are performing equally well
D) It is impossible to tell
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
