math guruu finance Prob. 1 in M$ in M$ in M$ 1Q 2Q 3Q 1Q 2Q 3Q 1Q 2Q 3Q Operating Revenues 1,638 1,692 1,748 Cash and equivalents 1,

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Prob. 1

in M$ in M$ in M$
1Q 2Q 3Q 1Q 2Q 3Q 1Q 2Q 3Q
Operating Revenues 1,638 1,692 1,748 Cash and equivalents 1,565 1,599 1,635 Accounts Payable 976 997 1,019
Operating Expenses: Accounts receivable 3,141 3,210 3,281 Air traffic liability 661 676 690
Salaries, wages and benefits 580 599 619 Fuel inventory 92 94 96 Accrued liabilities 117 120 122
Aircraft fuel and taxes 480 496 512 Parts and supplies inventory 102 104 107 Curr. maturities of LTD 518 529 541
Landing fees and other rents 101 104 108 Prepaid expenses 44 45 46 Other current liabilities 32 33 33
Depreciation/amortization 120 124 128 Total Current Assets 4,944 5,053 5,164 Total Current Liabilities 2,304 2,355 2,406
Maintenance and repairs 100 103 107 Property, Plant & Equipment 4,158 4,249 4,343 LTD and lease obligations 253 259 264
Other operating expenses 44 45 47 Allowance for depreciation 2,121 2,168 2,215 Pension obligations 163 167 170
Total Operating Expenses 1,425 1,472 1,521 Net PP&E 2,037 2,082 2,128 Deferred revenue 652 666 681
Operating Income 213 220 227 Goodwill 198 202 207 Non-current operating leases 801 819 837
Other income/(expense) 22 23 23 Other assets 322 329 336 Other long term liabilities 132 135 138
Income before taxes 235 243 251 Total Assets 7,501 7,666 7,835 Stockholder’s equity 3,196 3,266 3,338
Income tax expense 44 45 47 Total Liab. and equity 7,501 7,666 7,835
Net Income 191 197 204
Key Ratios
1Q 2Q 3Q
Days Receivable
Days Inventory
Operating Cycle
Days Payable
Cash Cycle

Prob. 2

a) Effective Annual Rate (EAR) b) Average Collection Period
Notional purchase Gross revenue
Discount (%) Avg. receivables before new policy
Days difference
alfonso canella: alfonso canella:
Difference in days from paying to get discount to paying with no discount
% paying early
Avg. receivables after new policy
Discount ($) Change in receivables
Rate (%) Cost of capital
Days difference in 1 year Projected savings in capital costs
minus: discounts
EAR Projected savings net of discounts
Gross margin
Gross revenues must rise by:
– in dollars
– in percent

v. JAN ’22

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