(16-11) Cash Conversion Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35 days, and a payables deferral period of 25 days. Assume that cost of goods sold is 80% of sales. Cycle a. What is the length of the firm's cash conversion cycle? b. If annual sales are $4,380,000 and all sales are on credit, what is the firm's investment in accounts receivable? C. How many times per year does Negus Enterprises turn over its inventory?

(16-11) Cash Conversion Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35 days, and a payables deferral period of 25 days. Assume that cost of goods sold is 80% of sales. Cycle a. What is the length of the firm's cash conversion cycle? b. If annual sales are $4,380,000 and all sales are on credit, what is the firm's investment in accounts receivable? C. How many times per year does Negus Enterprises turn over its inventory?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

(16-11)
Cash Conversion
Negus Enterprises has an inventory conversion period of 50 days, an average collection
period of 35 days, and a payables deferral period of 25 days. Assume that cost of goods
sold is 80% of sales.
Cycle
a. What is the length of the firm's cash conversion cycle?
b. If annual sales are $4,380,000 and all sales are on credit, what is the firm's investment
in accounts receivable?
C. How many times per year does Negus Enterprises turn over its inventory?

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