10. The Hopewell Pharmaceutical Company's balance sheet and income statement forlast year are as follows:CHALLENGEBalance Sheet (in Millions of Dollars)AssetsLiabilities and EquityCash and marketable$1,100Accounts payable***$900securitiesAccounts receivable*1,300Accrued liabilitiesInventories**800(salaries and benefits)300Other current assets200Other current liabilities700Total current assets$3,400Total current liabilities$1,900Plant and equipment (net)2,300Long-term debt and otherOther assets1,000liabilities1,000Total assets$6,700Common stock1,800Retained eamings2,000Total stockholders" equity$3,800Total liabilities and equity$6,700*Assume 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$6,500Cost of sales1,500Selling, general, and administrative expenses2,500Other expenses800Total expenses$4,800Eamings before taxes1,700Тахes680Earmings after taxes (net income)$1,020a. Determine Hopewell's cash conversion cycle.b. Give an interpretation of the value computed in Part a.

Cash conversion cycle is number of days to convert resources into cash flows. It can be calculated…

10. The Hopewell Pharmaceutical 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 $1,100 Accounts payable*** $900 securities Accounts receivable* 1,300 Accrued liabilities Inventories** 800 (salaries and benefits) 300 Other current assets 200 Other current liabilities 700 Total current assets $3,400 Total current liabilities $1,900 Plant and equipment (net) 2,300 Long-term debt and other Other assets 1,000 liabilities 1,000 Total assets $6,700 Common stock 1,800 Retained earnings 2,000

10. The Hopewell Pharmaceutical 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 $1,100 Accounts payable*** $900 securities Accounts receivable* 1,300 Accrued liabilities Inventories** 800 (salaries and benefits) 300 Other current assets 200 Other current liabilities 700 Total current assets $3,400 Total current liabilities $1,900 Plant and equipment (net) 2,300 Long-term debt and other Other assets 1,000 liabilities 1,000 Total assets $6,700 Common stock 1,800 Retained earnings 2,000

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Selected financial data for Wilmington Corporation is presented below. WILMINGTON CORPORATION Balance Sheet As of December 31 Year 7 Year 6 Current Assets Cash and cash equivalents $ 634,527 $ 335,597 Marketable securities 166,106 187,064 Accounts receivable (net) 284,226 318,010 Inventories 466,942 430,249 Prepaid expenses 60,906 28,060 Other current assets 83,053 85,029 Total Current Assets 1,695,760 1,384,009 Property, plant and equipment 1,384,217 625,421 Long-term investment 568,003 425,000 Total Assets $3,647,980 $2,434,430 Current Liabilities Short-term borrowings $ 306,376 $ 170,419 Current portion of long-term debt 155,000 168,000 Accounts payable 279,522 314,883 Accrued liabilities 301,024 183,681 Income taxes payable 107,509 196,802 Total Current Liabilities 1,149,431…

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