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Working Capital and Cash Conversion Cycle

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The Greek Connection
Balance Sheet
As of December 31, 2004
(thousands of dollars)

Assets Liabilities and Equity
Cash $2,000 Account payable $1,500
Account receivable $3,950 Notes payable $1,000
Inventory $1,300 Accruals $1,220
Total current assets $7,250 Total current liabilities $3,720

Net plant, property Long -term debt $3,000
and equipment $8,500 Total liabilities $6,720
Total assets $15,750 common equity $9,030
total liabilities and equity $15,750

Complete Chapter 26, problem 4-a on page 846. Enter your answer for the following:
The Greek Connection's net working capital in 2004 is ch
      
$3,350
      
$5,350
      
$3,550
      
$3,530
      
$4,530

2. Complete Chapter 26, problem 4-b on page 846. Enter your answer for the following:

Cash conversion cycle (CCC) of The Greek Connection in 2004 is
      
23.7 days
      
41.4 days
      
27.4 days
      
45.4 days
      
26.3 days

3. Complete Chapter 26, problem 4-c on page 846. Enter your answer for the following:

What would the cash conversion cycle for The Greek Connection have been in 2004 had it met the industry average for accounts receivable days?
      
23.7 days
      
41.4 days
      
27.4 days
      
45.1 days
      
26.3 days

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Solution Summary

This solution explains how to calculate net working capital and the cash conversion cycle of a company.

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