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Spartak Company is making progress in its operations from a net loss in 2018 to a net profit in 2019. While the founders, Elena and Oleg, are happy about these developments, they are concerned with trying to understand how long the firm takes to complete its cash conversion cycle in 2019. Use the following financial statements to make your calculations. Balance sheet items should reflect the averages of the 2018 and 2019 accounts. SPARTAK COMPANY INCOME STATEMENT Net sales Cost of goods sold Gross profit Marketing General and administrative Depreciation EBIT Interest Earnings before taxes Income taxes Net income (loss) 2018 $900,000 540,000 360,000 90,000 250,000 40,000 -20,000 45,000 -65,000 0 -$65,000 2019 $1,500,000 900,000 600,000 150,000 250,000 40,000 160,000 60,000 100,000 25,000 $ 75,000 BALANCE SHEET Cash Accounts receivable Inventories Total current assets Gross fixed assets Accumulated depreciation Net fixed assets Total assets 2018 $ 50,000 200,000 400,000 650,000 450,000 -100,000 350,000 $1,000,000 2019 $ 20,000 280,000 500,000 800,000 540,000 -140,000 400,000 $1,200,000 Accounts payable Accruals Bank loan Total current liabilities Long-term debt Common stock (0.05 par) Additional paid-in-capital Retained earnings Total liabilities and equity $ 130,000 50,000 90,000 270,000 300,000 150,000 200,000 80,000 $1,000,000 $160,000 70,000 100,000 330,000 400,000 150,000 200,000 120,000 $1,200,000

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