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A manufacturing company has the following financial data: • Credit sales = $4,500,000 • • • • • • Cost of goods sold = $2,700,000 Average accounts receivable = $750,000 Average inventory = $600,000 Average accounts payable = $450,000 Material costs represent 60% of the cost of goods sold Credit sales account for 75% of total sales Calculate the cash operating cycle for this company.

A manufacturing company has the following financial data: • Credit sales = $4,500,000 • • • • • • Cost of goods sold = $2,700,000 Average accounts receivable = $750,000 Average inventory = $600,000 Average accounts payable = $450,000 Material costs represent 60% of the cost of goods sold Credit sales account for 75% of total sales Calculate the cash operating cycle for this company.

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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A manufacturing company has the following financial data: • Credit sales = $4,500,000 • • • • • • Cost of goods sold = $2,700,000 Average accounts receivable = $750,000 Average inventory = $600,000 Average accounts payable = $450,000 Material costs represent 60% of the cost of goods sold Credit sales account for 75% of total sales Calculate the cash operating cycle for this company.
Transcribed Image Text:A manufacturing company has the following financial data: • Credit sales = $4,500,000 • • • • • • Cost of goods sold = $2,700,000 Average accounts receivable = $750,000 Average inventory = $600,000 Average accounts payable = $450,000 Material costs represent 60% of the cost of goods sold Credit sales account for 75% of total sales Calculate the cash operating cycle for this company.
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