Use the following information to determine a firm's "cash build:" net sales = $150,000; net income = $15,000; beginning-of-period accounts receivable = $60,000; end-of-period accounts receivable = $90,000; and interest = $10,000.
A) $10,000
B) $15,000
C) $30,000
D) $60,000
E) $120,000

Question

Quizplus · Accepted Answer

Cash build is calculated as net sales minus the increase in accounts receivable. Here, net sales are $150,000, and the increase in accounts receivable is $30,000 ($90,000 - $60,000), so the cash build is $120,000 ($150,000 - $30,000).

Use the Following Information to Determine a Firm's "Cash Build