51. ABC Company has P15,000,000 of sales, P2,000,000 of inventories, P3,000,000 of receivables and P1,000,000 of payables. Its cost of goods sold is 80% of sales, and it finances working capital with bank loan at 8% rate. The company wants to lower its inventories and receivables by 10% each and increase its payables by 10%, all without affecting sales or cost of goods sold, What would be the new cash conversion cycle if the changes are made? [nearest whole number]
51. ABC Company has P15,000,000 of sales, P2,000,000 of inventories, P3,000,000 of receivables and P1,000,000 of payables. Its cost of goods sold is 80% of sales, and it finances working capital with bank loan at 8% rate. The company wants to lower its inventories and receivables by 10% each and increase its payables by 10%, all without affecting sales or cost of goods sold, What would be the new cash conversion cycle if the changes are made? [nearest whole number]
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 7P
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![51. ABC Company has P15,000,000 of sales, P2,000,000 of inventories,
P3,000,000 of receivables and P1,000,000 of payables. Its cost of goods sold is
80% of sales, and it finances working capital with bank loan at 8% rate. The
company wants to lower its inventories and receivables by 10% each and
increase its payables by 10%, all without affecting sales or cost of goods sold,
What would be the new cash conversion cycle if the changes are made? [nearest
whole number]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F79b9f846-1223-444e-b6e8-6b393cc59d9d%2F62b51246-3eef-4083-acc0-9b592b02d5d0%2Fos882wj_processed.png&w=3840&q=75)
Transcribed Image Text:51. ABC Company has P15,000,000 of sales, P2,000,000 of inventories,
P3,000,000 of receivables and P1,000,000 of payables. Its cost of goods sold is
80% of sales, and it finances working capital with bank loan at 8% rate. The
company wants to lower its inventories and receivables by 10% each and
increase its payables by 10%, all without affecting sales or cost of goods sold,
What would be the new cash conversion cycle if the changes are made? [nearest
whole number]
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