Question: Question 3 - PART A (7 Marks) Consider the following financial statement information of ESPY Limited: Item Beginning $ Ending $ Inventory 56,000 64,000 Accounts

Question 3 - PART A (7 Marks)

Consider the following financial statement information of ESPY Limited:

Item

Beginning

$

Ending

$

Inventory

56,000

64,000

Accounts Receivable

116,000

64,000

Accounts Payable

104,000

96,000

Sales for the year just ended were $4,400,000 and the cost of goods sold was $1,500,000.

Required:

a) The financial controller of ESPY Limited has requested you to calculate the operating and cash cycles of the company? (5 marks)

b) How do you interpret (or explain) your calculations/results, from Part A above?

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