Published on December 1, 2015
For more classes visit www.snaptutorial.com 1) Finding operating and free cash flows consider the balance sheets and selected data from the income statement of Keith Corporation. 2) Pro forma balance sheet – Basic Leonard Industries wishes to prepare a pro forma balance sheet for December 31, 2016. The firm expects 2016 sales to total $3,000,000. 3) Aggressive versus conservative seasonal funding strategy Dynacare Tool has forecast its total funding requirements for the coming year. 4) Initiating a cash discount Gardner Company currently makes all sales on credit and offers no cash discount. The firm is considering offering a 3% cash discount for payment within 15 days. The firm’s current average collection period is 60 days, sales are 40,000 units, selling price is $46 per unit, and visible cost per unit is $30. The firm expects that the change in credit terms will result in an increase in sales. 5) Cash conversion cycle American Products is concerned about managing cash efficiently. On the average, inventories have an age of 94 days, an accounts receivable are collected in 65 days. Accounts payable are paid approximately 30 days after they arise. The firm has annual sales of about $31 million. Cost of goods sold is $22 million, and purchases are $13 million.