The Butler-Huron Company’s balance sheet and income statement for last year are as follows: Balance Sheet (in Millions of Dollars) Assets Liabilities and Equity Cash and marketable securities $139 Accounts payable*** $1,077 Accounts receivable* 976 Accrued liabilities Inventories** 1,920 (salaries and benefits) 636 Other current assets 39 Other current liabilities 501 Total current assets $3,074 Total current liabilities $2,214 Plant and equipment (net) 3,503 Long-term debt and other Other assets 6,625 liabilities 2,510 Total assets $6,625 Common stock 151 Retained earnings 1,750 Total stockholders’ equity $1,901 Total liabilities and equity $6,625 Assume that all sales are credit sales and that average accounts receivable are the same as ending accounts receivable. Assume that average inventory over the year was the same as ending inventory. Assume that average accounts payable are the same as ending accounts payable. Income Statement (in Millions of Dollars) Net sales $14,290 Cost of sales 10,913 Selling, general, and administrative expenses 2,133 Other expenses 768 Total expenses $13,814 Earnings before taxes 476 Taxes 190 Earnings after taxes (net income) $286 Assume that there are 365 days per year. Determine Butler-Huron’s cash conversion cycle. Round intermediate calculations and answer to one decimal place. days Determine Butler-Huron’s cash conversion cycle assuming that 65 percent of annual sales are credit sales (that is, 35% represent cash sales). Round intermediate calculations and answer to one decimal place. days Determine Butler-Huron’s cash conversion cycle assuming that 35 percent of annual sales are credit sales. Round intermediate calculations and answer to one decimal place. days

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 50E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...

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Question

The Butler-Huron Company’s balance sheet and income statement for last year are as follows:

Balance Sheet (in Millions of Dollars)

Assets		Liabilities and Equity

Cash and marketable securities	$139	Accounts payable***	$1,077
Accounts receivable*	976	Accrued liabilities
Inventories**	1,920	(salaries and benefits)	636
Other current assets	39	Other current liabilities	501
Total current assets	$3,074	Total current liabilities	$2,214
Plant and equipment (net)	3,503	Long-term debt and other
Other assets	6,625	liabilities	2,510
Total assets	$6,625	Common stock	151
		Retained earnings	1,750
		Total stockholders’ equity	$1,901
		Total liabilities and equity	$6,625

*Assume that all sales are credit sales and that average accounts receivable are the same
as ending accounts receivable.
**Assume that average inventory over the year was the same as ending inventory.
***Assume that average accounts payable are the same as ending accounts payable.

Income Statement (in Millions of Dollars)

Net sales	$14,290
Cost of sales	10,913
Selling, general, and administrative expenses	2,133
Other expenses	768
Total expenses	$13,814
Earnings before taxes	476
Taxes	190
Earnings after taxes (net income)	$286

Assume that there are 365 days per year.

Determine Butler-Huron’s cash conversion cycle. Round intermediate calculations and answer to one decimal place.
days
Determine Butler-Huron’s cash conversion cycle assuming that 65 percent of annual sales are credit sales (that is, 35% represent cash sales). Round intermediate calculations and answer to one decimal place.
days
Determine Butler-Huron’s cash conversion cycle assuming that 35 percent of annual sales are credit sales. Round intermediate calculations and answer to one decimal place.
days

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