Question

In: Finance

(i) The following information is extracted from the financial statements of XERO


(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

(a) Briefly explain what you understand by the term ‘operating cycle’. (1 mark)
Click or tap here to enter text.

(b) What is the operating cycle for XERO Limited?
Click or tap here to enter text.

(c) What can you say about XERO Limited’s accounts receivable and inventory
management if it is known that the industry average operating cycle is 72 days? (1
mark)

Click or tap here to enter text.

(d) Briefly explain what you understand by the ‘cash conversion cycle’. (1 mark)

Click or tap here to enter text.

(e) What is the cash conversion cycle for XERO Limited? (1 mark)

Click or tap here to enter text.

(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? (1 mark)

Click or tap here to enter text.

(ii) The current ratio and net working capital are good predictors of a firm's
ability to meet its short-term obligations. Do you agree or disagree? Provide
your rationale.

Solutions

Expert Solution

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

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 (b) What is the operating cycle for XERO Limited? (c) What can you say about XERO Limited’s accounts receivable and inventory management if it is known that the industry average operating cycle is 72 days? (d) Briefly explain what you...
i) The following information is extracted from the financial statements of XERO Limited: Cash $677,423 Accounts...
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 (a) Briefly explain what you understand by the term ‘operating cycle’. ​(1 mark) b) What is the operating cycle for XERO Limited? ​(1 marks c) What can you say about XERO Limited’s accounts receivable and inventory management if it is known...
The following information was extracted from the 2020 financial statements of Arigato LLC:
The following information was extracted from the 2020 financial statements of Arigato LLC:Income from continuing operations before income tax           $755,123Selling and administrative expenses                                            480,357Income from continuing operations                                            495,951Gross profit                                                                                           1,357,530The amount reported for Other Revenue/Gains and Other Expenses/Losses is: $  Blank 1. Fill in the blank, read surrounding text.Use “-“ sign for negative amount, as needed. Use commas, as needed.
The following financial information was extracted from MCL’s current draft financial statements and those of the...
The following financial information was extracted from MCL’s current draft financial statements and those of the previous year:​ 2017 ($M) 2016 ($M) 2015 ($M) Revenue 220 260 240 Total assets 260 280 250 Net Profit before tax 19 (3) 17 The car parts and accessories industry has been very competitive and consumer demand appears to be slowing in anticipation of change with electric and driverless cars coming into the market. The company has recently restructured its operations to outsource its...
The following information has been extracted from the financial statements of a company. Use it to...
The following information has been extracted from the financial statements of a company. Use it to answer the 4 questions that follow it. When answering the questions (filling in the blanks), DO NOT use dollar signs, USE commas to separate thousands, DO NOT use parenthesis to denote negative numbers, USE the negative sign in front of first digit for negative numbers. Round to the nearest dollar. Earnings before interests and taxes: EBIT in 2020 = 600 Tax rate: T =  ...
The following information has been extracted from the financial statements of a company. Use it to...
The following information has been extracted from the financial statements of a company. Use it to answer the 4 questions that follow it. When answering the questions (filling in the blanks), DO NOT use dollar signs, USE commas to separate thousands, DO NOT use parenthesis to denote negative numbers, USE the negative sign in front of first digit for negative numbers. Round to the nearest dollar. Earnings before interests and taxes: EBIT in 2020 = 400 Tax rate: T =  ...
FINANCIAL STATEMENT ANALYSIS AND INTERPRETATION The following information has been extracted from the financial statements and...
FINANCIAL STATEMENT ANALYSIS AND INTERPRETATION The following information has been extracted from the financial statements and notes of Brown Ltd. 2014 2013 Revenue $ 870 000 $ 862 500 Interest expense 34 500 39 750 Income tax expense 66 900 39 750 Profit 78 750 84 150 Dividends 42 000 42 000 Total assets 810 000 832 500 Total debt 429 750 458 250 Share capital 258 000 243 000 Retained earnings 122 250 131 250 Required: Using the above...
The following information as at the year-end date is extracted from the Freddy Corporation's financial statements:...
The following information as at the year-end date is extracted from the Freddy Corporation's financial statements: December 31 2019 ($) 2018 ($) Cash 95,000 27,000 Accounts receivable 92,000 80,000 Allowance for doubtful accounts (4,500) (3,100) Inventory 155,000 175,000 Prepaid expenses 7,500 6,800 Land 90,000 60,000 Buildings 287,000 244,000 Buildings - Accumulated depreciation (32,000) (13,000) Machinery 50,000 60,000 Machinery- Accumulated depreciation (30,000) (25,000) Leased equipment* 28,594 - Leased equipment - Accumulated depreciation (9,531)                          - 729,063 611,700 Accounts payable 90,000 84,000 Accrued...
1 The following information is extracted from the financial statements of Tasty Road Bhd. at 31...
1 The following information is extracted from the financial statements of Tasty Road Bhd. at 31 December 2018. Tasty Road Bhd. Statement of Financial Position as at 31 December 2018 RM’000 Assets 2700 Cash 2700 Trade Receivable(Net) 400 Interest Receivable 1100 Inventory 2000 Plant 2000 Research & Development 8000 Total 16,800 Equity & Liabilities Trade Payable 2,900 Loan 4,650 Provision for Warranties 150 Deferred tax liability 290 Share Capital 7,000 Retained Earnings 1.750 Total 16,800 RM’000 Additional information for relevant...
The following information has been extracted from the financial statements of YDI Limited: Extract of Statement...
The following information has been extracted from the financial statements of YDI Limited: Extract of Statement of Comprehensive Income for the year ended 31 December 2019 2018 R R Sales 2 000 000 1 600 000 Cost of sales 940 000 800 000 Operating profit 600 000 520 000 Profit before tax 520 000 450 000 Profit after tax 364 000 315 000 Extract of Statement of Financial Position as at 31 December Assets 2019 2018 R R Non-current assets...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT