Mansfield_and_Harnishfager_solutions (1)

Mansfield_and_Harnishfager_solutions (1)

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Mansfield Manufacturing 2007 2008 Cash 105 105 6350/365 17.39726 Mkt Securities 35 35 328/(17.39726) A/R 328 696 2007 ACP 18.9 days Inventory 490 490 40 days 17.4*40= 696 Total Current Assets 958 1326 60 days 1043.8 Fixed Assets 1392 1392 Chg. In A/R results in $368 USE of funds Less: ACC. Depr. -433 125 -558 Net Fixed Assets 959 834 NI plus Depr.= Net Cash from Operations 208 368-208= 160 Other Assets 37 37 TOTAL ASSETS 1954 2197 2008 B/S 2197-2037= 160 Shortfall in funding??? A/P 175 175 Notes Payable 150 150 What Can we Do too Finance the Gap? Acc. Expenses 166 166 Acc. Taxes 49 49 Utilize some of our excess cash Total Current Liab. 540 540 Borrow from the Bank Stretch our Payables? How Much Long Term Debt 100 100 Preferred Stock 300 300 One day of Purchases? $ 10.06 Common Stock 600 600 3672/365 per day Retained Earnings 414 83 497 Total Stock. Equity 1314 1397 So we need to pay slower by TOTAL Liab & Equity 1954 2037 160/10.06 16 days Sales 6350 COGS 5430 Purchases 3672 Gross Profit 920 14.5% Depr. 125 Taxes 81 Net Income 83 1.3%
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