Question

Help with #8 please?

quarter ending December 31, 2017. B. Prepare monthly pro forma balance sheets at the end of October, November, and December 2017. C. Prepare both a monthly cash budget and pro forma statements of cash flows for October, Novem ber, and December 2017. D. Describe your findings and indicate the maximum amount of bank borrowing that is needed & Cash Conversion Cycle Two years of financial statement data for the Munich Export Corpor shown below. A. Calculate the inventory-to-sale, sale-to-cash, and purchase-to-payment conversion periods for Munich Exports for 2016. B. Calculate the length of Munich Exports' cash conversion cycle for 2016. MUNICH EXPORTS CORPORATION BALANCE SHEET 2015 2016 Cash Accounts receivable Inventories Total current assets Fixed assets, net Total assets $ 50,000 200,000 450,000 700,000 300,000 $1,000,000 $ 50,000 300,000 570,000 920,000 380,000 $1,300,000

Answer 1

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Answer:

Please find the excel image for solution:

Average Accounts Receivable = (Accounts Receivable 2015 + Accounts Receivable 2016)/2 = (200000 + 300000)/2 = $ 250000 Average Inventory = (Inventory 2015 + Inventory 2016)/2 = (450000 + 570000)/2 = $ 510000 Average Accounts Payable = (Accounts Payable 2015 + Accounts Payable 2016)/2 = (130000 + 180000)/2 = $ 155000 Net Sales 2016 = 16000 S and Cost of Goods Sold (COGS) = 96000 1600000 $ and Cost of Goods Sold (COGS) = $ 960000 Inventory to Sale Period = 365 / [COGS / Average Inventory] = 365 / [960000 / 510000] = 193.096 days - 193 days Sale to Cash Period = 365 / [Net Sales / Average Accounts Receivable] = 365 / [1600000 / 250000) = 57.03125 days - 57days Purchase to Payment Period = 365 / [Net Sales / Average Accounts Payable) = 365 / [960000 / 155000] = 58.93 days - 59 days Cash Conversion Cycle = Inventor to Sales Period + Sales to Cash Period - Purchase to Payment Period = 193 + 57 - 59 = 191 days