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A firm currently has a 35-day cash cycle. Assume that the firm changes its operations such that it decreases its receivables period by 4 days, increases its inventory period by 2 days and decreases its payables period by 3 days. What will the length of the cash cycle be after these changes? How did you calculate the number?

A firm currently has a 35-day cash cycle. Assume that the firm changes its operations such that it decreases its receivables period by 4 days, increases its inventory period by 2 days and decreases its payables period by 3 days. What will the length of the cash cycle be after these changes? How did you calculate the number?

FINANCIAL ACCOUNTING
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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How did you calculate the number?

A firm currently has a 35-day cash cycle. Assume that the firm changes its operations such that it decreases its receivables period by 4 days, increases its inventory period by 2 days and decreases its payables period by 3 days. What will the length of the cash cycle be after these changes? How did you calculate the number?
Transcribed Image Text:A firm currently has a 35-day cash cycle. Assume that the firm changes its operations such that it decreases its receivables period by 4 days, increases its inventory period by 2 days and decreases its payables period by 3 days. What will the length of the cash cycle be after these changes? How did you calculate the number?
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