Canadian Products is concerned about managing its operating assets and liabilities efficiently. Inventories have an average age of 110 days, and accounts receivable have an average age of 50 days. Accounts payable are paid approximately 40 days after they arise. The firm has annual sales of $36 million, its cost of goods sold represents 75 percent of sales, and its purchases represent 70 percent of the cost of goods sold. Assume a 365-day year. a. Calculate the firm's operating cycle (OC). b. Calculate the firm's cash conversion cycle (CCC). c. Calculate the amount of total resources Canadian Products has invested in its CCC. d. Discuss how management might be able to reduce the amount of total resources invested in the CCC.

Owen's Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity. Assets Cash Accounts receivable Inventory Current assets Fixed assets Total assets New funds $7 25 28 $ 60 45 Balance Sheet (in $ millions) $ 105 Liabilities and Stockholders' Equity Accounts payable Accrued wages Accrued taxes Current liabilities Notes payable Common stock Retained earnings Total liabilities and stockholders' equity X Answer is complete but not entirely correct. $ 11,900,000 X $ 20 7 13 $ 40 Owen's Electronics has an aftertax profit margin of 10 percent and a dividend payout ratio of 45 percent. If sales grow by 20 percent next year, determine how many dollars of new funds are needed to finance the…

Owen's Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity. Assets Cash Accounts receivable Inventory Current assets Fixed assets Total assets Balance Sheet (in $ millions) Liabilities and Stockholders' Equity $ 2 Accounts payable 22 24 $ 48 43 Accrued wages Accrued taxes Current liabilities Notes payable Common stock Retained earnings $91 Total liabilities and stockholders' equity $ 16 4 10 $30 Answer is complete but not entirely correct. New funds $ 8,075,000 > 12 17 32 $ 91 Owen's Electronics has an aftertax profit margin of 6 percent and a dividend payout ratio of 45 percent. If sales grow by 20 percent next year, determine how many dollars of new funds are needed to…

Owen's Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity. Cash Accounts receivable Inventory Current assets Fixed assets Total assets New funds Assets E 122 TOLCIE E S Balance Sheet (in $ millions) E $ 12 27 28 $ 67 45 N Owen's Electronics has an aftertax profit margin of percent and a dividend payout ratio of 40 percent. If sales grow by 30 percent next year, determine how many dollars of new funds are needed to finance the growth. Note: Do not round intermediate calculations. Enter your answer in dollars, not millions, (e.g., $1,234,567). $ 112 Liabilities and Stockholders' Equity Accounts payable Accrued wages Accrued taxes Current liabilities Notes payable Common stock…

Owen's Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity. Assets Cash Accounts receivable Inventory Current assets Fixed assets Total assets $ 10 32 33 $ 75 New funds $118 Balance Sheet (in $ millions) Liabilities and Stockholdera Equity Accounts payable Accrued wages Accrued taxes Current liabilities Notes payable Common stock Retained earnings Total liabilities and stockholders' equity $18 7 11 $ 36 14 17 51 $118 TOUS REPOR Owen's Electronics has an aftertax profit margin of 9 percent and a dividend payout ratio of 50 percent. STA U SLU KUTEN HOTEL If sales grow by 25 percent next year, determine how many dollars of new funds are needed to finance the growth. (Do not…

Camp Manufacturing turns over its inventory eight times each year, has an average payment period of 35 days, and has an average collection period of 60 days. The firm’s annual sales are $3.5 million. Assume there is no difference in the investment per dollar of sales in inventory, receivables, and payables and that there is a 365-day year. If the firm pays 14% for these resources, by how much would it increase its annual profits by favorably changing its current cash conversion cycle by 20 days?

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The S&H construction company expects to have total sales next year totaling $15,300. In addition, the firm pays taxes at 35 percent and will owe $280,000 in interest expense. Based on last year’s operations the firm’s management predicts that its cost of goods sold will be 57 percent of sales and operating expenses will total 32 percent. What is your estimate of firm’s net income after taxes for the coming year? Complete the forma income statement below Round to the nearest dollar Pro-forma income statement Sales Cost of goods sold Gross profit Operating expenses Net operating income Interest expenses Earnings before taxes Taxes Net income