1 MANZANITA Inc 2 Balance Sheet information (USS miltions) 3 As of December 31 4

Question

1 MANZANITA Inc 2 Balance Sheet information (USS miltions) 3 As of December 31 4 ·Cash and cash equivalent 5 Accounts recelvable 6 Inventories 7 Other current assets 2014 2013 Total current assets 3,380 9,105 2.997 8,916 11,913 9 Property and equlpment net Total assets 10 11 Account payable 12 Other current iabilities 13 14 Long-term debt 15 16 Common stock and paid in Capital 17 Retaîned earnings 18 | Total shareholders' equity 2,696 3,073 Total current liablities 1,932 1,812 5,387 4,956 1,570 Total liabilities 4,956 2,212 .168 Total liabilities and shareholders' equity 12,48511913 20 22 For Years Ended December 31 23 Sales 24 Cost of goods soldE 25 Depreciation expenseE 26 Seling, general, and administrative expense 27 Interest expense 28 Income tax expense 29 Net income 2014 2013 13 03812483 6,633 417 4,968 4911 54 144 76 31 Notes 32 The LIFO reserves as of December 31 20 33 The effective taratefor 2014 and earlier periods is 20%. 34 No ltems Impacted retained earnings other than net Income and 35 36 37 2013 are $465 million and $351 million

Explanation / Answer

Manzanita Inc (Figures in USD Mn, except Ratio) 2014 2013 Sales 13038 12483 Less: Cost of Goods Sold 6633 6441 6405 6042 COGS as % of Sales 51% 52% LIFO Reserve 465 351 Accounts Receivable 1378 1364 Accounts Payable 689 502 Inventory 1260 1015 FIFO Equivalent Inventory 1725 1366 Cash Conversion Cycle (days) - LIFO Method            277 Days Inventory =365/1.46            250 =+Days Receivables =365/2.38            154 =-Days Payables =365/2.89            126 Receivables Turnover Ratio =13038/(1378+1364)/2           2.38 Payables Turnover Ratio =(6633+(1260-1015))/(689+502)/2           2.89 Inventory Turnover =(6633/(1260+1015)/2)           1.46 Cash Conversion Cycle (days) - FIFO Method            369 Days Inventory =365/1.46            340 =+Days Receivables =365/2.38            154 =-Days Payables =365/2.89            124 Receivables Turnover Ratio =13038/(1378+1364)/2           2.38 Payables Turnover Ratio =(6633+(1725-1366))/(689+502)/2           2.94 Inventory Turnover =(6633/(1725+1366)/2)           1.07

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