If:

1. Net Sales P 18,000,000.00

ASSETS LIABILITIES & EQUITY

Cash 633,698.63 Current Liabilities 1,350,000

Receivables 986,301.37 Long-term Payable 225,000
Inventory 1,080,000
Plant and Equipment 1,800,000 Equity 2,925,000

Total Assets 4,500,000 Total Liabilities & Equity 4,500,000

Information Provided:

Debt to Assets = 35%

Quick Ration = 1.2
Asset Turnover = 4 times Total Assets = 4,500,000
Fixed Asset Turnover = 10 times P&E = 1,800,000
Current Ratio = 2:1
Average Collection Period = 20 days

2. Plant and Equipment is P1,000,000.00

ASSETS LIABILITIES & EQUITY

Cash 352,054.79 Current Liabilities 750,000

Receivables 547,945.21 Long-term Payable 125,000
Inventory 600,000
Plant and Equipment 1,000,000 Equity 1,625,000

Total Assets 2,500,000 Total Liabilities & Equity 2,500,000

3. Receivables is P500,000.00
 ASSETS LIABILITIES & EQUITY

Cash 321,250 Current Liabilities 684,375

Receivables 500,000 Long-term Payable 114,062.50
Inventory 547,500
Plant and Equipment 912,500 Equity 1,482,812.50

Total Assets 2,281,250 Total Liabilities & Equity 2,281,250

1. XYZ, Inc. has the following data:

Annual Sales ₱ 2,232,285,723

Cost of goods sold 1,586,689,228
Inventory 147,905,322
Accounts receivable 1,307,523,781
Accounts payable 601,064,266
Working days 258 days

What is the firm’s cash conversion cycle?

Cash
Days Sales Days Inventory Days Payable
Conversion =
Outstanding Outstanding Outstanding
Cycle
Cash 1,307,523,781.00 147,905,322.00 601,064,266.0
Conversion = 2,232,285,723.00 1,586,689,228.00 1,586,689,228.0
Cycle 258 258 25
Cash + -
Conversion = 1,307,523,781.00 147,905,322.00 601,064,266.0
Cycle
Cash
Conversion 8,652,270.24 6,149,958.25 6,149,958.2
Cycle
= 151.12 24.05 97.7
Cash
Conversion = 77.43
Cycle

2. ABC Corporation has the following data:

Annual Sales ₱ 2,533,332

 Cost of goods sold 2,127,778
Inventory 600,000
Accounts receivable 700,000
Accounts payable 400,000

What is the firm’s cash conversion cycle?

Cash
Days Sales Days Inventory Days Payable
Conversion =
Outstanding Outstanding Outstanding
Cycle
Cash 700,000.00 600,000.00 400,000.00
Conversion = 2,533,332.00 2,127,778.00 2,127,778.00
Cycle 365 365 365
Cash + -
Conversion = 700,000.00 600,000.00 400,000.00
Cycle
Cash
Conversion 6,940.64 5,829.53 5,829.53
Cycle
= 100.86 102.92 68.62
Cash
Conversion = 135.16
Cycle