Description
Working capital and Characteristics of Bonds
Complete the following problems:
- Problem 9-1: Cash conversion cycle
- Problem 9-2: Short term vs. long term financing
- Problem 9-3: Cost of trade credit
- Problem 9-4: Bond valuation
- Problem 9-5: Bond interest rates
You can access the problem details by clicking on attached file.
Complete the problems in an Excel spreadsheet. Be sure to show your work to receive credit. You should get all results from Excel formula.
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Explanation & Answer
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Problem 9-1:
Chapter15
Cash Conversion Cycle
Given the following information: (Amounts in 000's SAR)
20X1
20X2
20X3
Sales – net
4.250
5.314
7.877
Cost of goods sold
2.975
3.720
5.514
Accounts receivable
618
799
1.091
Inventories
332
445
639
Accounts payable
425
670
704
Calculate for each year:
(1) Days sales outstanding
(2) Days of sales in inventory
(3) Days payable outstanding
(4) Cash conversion cycle
20X4
10.942
7.659
1.348
382
1.555
Problem 9-2:
Chapter 15
Short-term vs. long-term financing
Medina Hardware operates many hardware stores and is planning to expand to other areas.
The firm has historically reinvested earnings and borrowed using short-term borrowing.
Recent financial results are as follows: (All amounts in 000's SAR)
20X1
Current assets
Fixed assets
Total assets
Current liabilities
Long-term liabilities
Owner's equity
Total liabilities & equity
900
2.400
3.300
400
900
2.000
3.30...