Question

Question (i) The following information is extracted from the financial statements of XERO Limited: Cash $677,423...

Question

(i) The following information is extracted from the financial statements of XERO
Limited:
Cash $677,423 Accounts Payable $1,721,669
Accounts Receivable $1,845,113 Notes Payable $2,113,345
Inventories $1,312,478
Total Current Assets $3,835,014 Total Current Liabilities $3,835,014
Net Sales $9,912,332
Cost $5,947,399


(e) What is the cash conversion cycle for XERO Limited?

(f) What can you say about XERO Limited’s cash conversion cycle if it is known that
the industry average cash conversion cycle is 42 days?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

e]

CCC = DIO + DSO - DPO

DIO = inventory * 365 / COGS = $1,312,478 * 365 / $5,947,399 = 80.55 days

DSO =  Accounts Receivable * 365 / sales =  $1,845,113 * 365 / $9,912,332 = 67.94 days

DPO =  Accounts Payable * 365 / COGS =  $1,721,669 * 365 / $5,947,399 = 105.66 days

CCC =  80.55 + 67.94 - 105.66

CCC = 42.83 days

f]

XERO Limited’s cash conversion cycle is almost identical to the industry average cash conversion cycle.

XERO Limited’s cash conversion cycle is neither better nor worse than the  industry average

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
How to solve this? Summary information from the financial statements of two companies competing in the...
How to solve this? Summary information from the financial statements of two companies competing in the same industry follows. Barco Company Kyan Company Barco Company Kyan Company Data from the current year-end balance sheets Data from the current year’s income statement Assets Sales $ 790,000 $ 927,200 Cash $ 18,500 $ 37,000 Cost of goods sold 588,100 642,500 Accounts receivable, net 36,400 59,400 Interest expense 8,200 16,000 Current notes receivable (trade) 10,000 7,800 Income tax expense 15,185 25,597 Merchandise inventory...
The simplified balance of the Greek Connection is shown below. It had sales and a cost...
The simplified balance of the Greek Connection is shown below. It had sales and a cost of goods sold as shown in last rows of the Table. THE GREEK CONNECTION Balance Sheet As of December 31, 2015 (thousands of dollars) Assets Liabilities and Equity Cash 2200 Accounts payable 1500 Accounts receivable 3950 Notes payable 1000 Inventory 1300 Accruals 1220 Total current assets 7450 Total current liabilities 3720 Net plant, property Long-term debt 3200 and equipment 8500 Total liabilities 6820 Total...
Accounts Receivable Turnover The following financial data is from Hi-Tech Instruments' financial statements (thousands of dollars,...
Accounts Receivable Turnover The following financial data is from Hi-Tech Instruments' financial statements (thousands of dollars, except earnings per share.) 2016 Sales revenue $209,000 Cost of goods sold 125,000 Net income 8,300 Dividends 2,600 Earnings per share 4.15 Hi-Tech Instruments, Inc. Balance Sheet (Thousands of Dollars) Dec. 31, 2016 Dec. 31, 2015 Assets Cash $18,300 $18,000 Accounts receivable (net) 45,000 40,000 Inventory 39,500 43,700 Total current assets 102,800 101,700 Plant assets (net) 52,600 50,500 Other assets 15,600 13,800 Total assets...
The following financial data is from Hi-Tech Instruments' financial statements (thousands of dollars, except earnings per...
The following financial data is from Hi-Tech Instruments' financial statements (thousands of dollars, except earnings per share.) 2016 Sales revenue $210,000 Cost of goods sold 125,000 Net income 8,300 Dividends 2,600 Earnings per share 4.15 Hi-Tech Instruments, Inc. Balance Sheet (Thousands of Dollars) Dec. 31, 2016 Dec. 31, 2015 Assets Cash 19,300 $18,000 Accounts receivable (net) 46,000 41,000 Inventory 39,500 43,700 Total current assets 104,800 102,700 Plant assets (net) 52,600 50,500 Other assets 15,600 13,800 Total assets 173,000 $167,000 Liabilities...
QUESTION 2    The details of JJA (Limited) are as follows, from the financial statements compiled...
QUESTION 2    The details of JJA (Limited) are as follows, from the financial statements compiled as per IFRS. JJA (Limited) – Extract from income statement for the year ended 28 February 2019. Sales 9 000 000 Cost of sales 5 625 000 Operating profit 3 375 000 Income tax (426 000) Net profit after tax 2 949 000 JJA (Limited) – Balance sheet as at 28 February 2019: ASSETS Non-current assets 4 626 000 Tangible assets 4 326 000...
     The following table shows Toshiba's financial statements Assets: Amount Cash and marketable securities $400,000 Accounts...
     The following table shows Toshiba's financial statements Assets: Amount Cash and marketable securities $400,000 Accounts receivable 1,415,000 Inventories    1,847,500 Prepaid expenses 24,000 Total current assets 3,686,500 Fixed assets        2,800,000 Less: accum. depr. (1,087,500) Net fixed assets 1,712,500 Total assets $5,399,000 Liabilities: Accounts payable $600,000 Notes payable   875,000 Accrued taxes 92,000 Total current liabilities $1,567,000 Long-term debt 900,000 Common Stock (100,000 shares) 700,000 Retained Earnings 2,232,000 Total liabilities and owner's equity $5,399,000 Net sales (all credit) $6,375,000 Less: Cost of...
Consider the following financial statements for Industrial Supply Company. (Actual) December 31, Balance sheet Year 1...
Consider the following financial statements for Industrial Supply Company. (Actual) December 31, Balance sheet Year 1 Comments Assets Cash $     400,000 20% increase (assumption) Accounts receivable 2,000,000 20% increase (assumption) Inventories 4,400,000 20% increase (assumption)     Total current assets $  6,800,000 Fixed assets, net $  1,200,000 20% increase (assumption)     Total assets (A) $  8,000,000 Liabilities and Equity Accounts payable (CL) $  1,200,000 20% increase (assumption) Notes payable 1,500,000     Total current liabilities $  2,700,000 Long-term debt 500,000 No change (assumption) Stockholders’ equity 4,800,000     Total liabilities and equity $  8,000,000...
Return on Assets The following financial data is from Hi-Tech Instruments' financial statements (thousands of dollars,...
Return on Assets The following financial data is from Hi-Tech Instruments' financial statements (thousands of dollars, except earnings per share.) 2016 Sales revenue $210,000 Cost of goods sold 125,000 Net income 9,300 Dividends 3,600 Earnings per share 4.65 Hi-Tech Instruments, Inc. Balance Sheet (Thousands of Dollars) Dec. 31, 2016 Dec. 31, 2015 Assets Cash $19,800 $18,000 Accounts receivable (net) 46,000 41,000 Inventory 39,500 43,700 Total current assets 105,300 102,700 Plant assets (net) 52,600 50,500 Other assets 15,600 13,800 Total assets...
Use the data from the following financial statements What are the net fixed assets for the...
Use the data from the following financial statements What are the net fixed assets for the years 2013 and​ 2014? The net fixed assets for the year 2013 is please explain a step by step process Partial Income Statement Year Ending 2014 Sales revenue $350,000 Cost of goods sold $140,000 Fixed costs $43,000 Selling, general, and administrative expenses $28,000 Depreciation $46,000 Partial Balance Sheet 12/31/2013 ASSETS LIABILITIES Cash $16,000 Notes payable $14,000 Accounts receivable $28,000 Accounts payable $19,000 Inventories $48,000...
Canadian Bacon Inc. financial statements are presented in the table below.             Based on the information in...
Canadian Bacon Inc. financial statements are presented in the table below.             Based on the information in the table, and using a 365-day year, calculate operating cycle. Round the answers to two decimal places    Balance Sheet December 31, 2014 Cash and marketable securities $132,000 Accounts payable $399,000 Accounts receivable $311,000 Notes payable $98,500 Inventories $512,000 Accrued expenses $89,300 Prepaid expenses $11,300 Total current liabilities $586,800 Total current assets $966,300 Long-term debt $799,400 Gross fixed assets $2,104,000 Par value and paid-in-capital...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT