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Question
Gates Industries balance sheet and income statement for the year ending December 31, 200X are as follows:| Balance Sheet ($ million) | ||||
| Cash | $10.0 | Accounts payable | $15.0 | |
| Accounts receivable | 15.0 | Salaries, benefits, & payroll taxes payable | 3.0 | |
| Inventories* | 12.0 | Long-term debt | 15.0 | |
| Fixed assets (net) | 30.0 | Stockholders' equity | 34.0 | |
| Total assets | $67.0 | Total liab. & stock. equity | $67.0 | |
| Income Statement ($ million) | |
| Net sales (all credit) | $125.0 |
| Cost of sales | 75.0 |
| Selling, general, & admin. expenses | 30.0 |
| Other expenses | 13.0 |
| Earnings after tax | $ 7.0 |
*Note: Average inventories also equal $12.0 (million).
Determine the length of the firm's cash conversion cycle.
a. 102.2 days
b. 29.2 days
c. 39.6 days
d. cannot be computed with the information provided
Answer
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