A company has international sales with 90 days term. Their Inventory turnover period is 30 days. What is the difference in percentage of profit in a year if they decrease the selling term to 60 days? The cost of goods is 10 and their selling price is 12.5

A company has international sales with 90 days term. Their Inventory turnover period is 30 days. What is the difference in percentage of profit in a year if they decrease the selling term to 60 days? The cost of goods is 10 and their selling price is 12.5

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

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