What is the firm's cash conversion cycle? General accounting ABC has $45 million of accounts receivable, $43million of inventory, and $61 million of accountspayable. Its average daily sales are $814,000 andits gross profit margin is 30%. What is the firm'scash conversion cycle?

Step 1: Define Operating CycleThe operating cycle determines the period a company takes to convert…

Answered: ABC has $45 million of accounts…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter16: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P

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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. What is the length of the firm’s cash conversion cycle? If annual sales are $4,380,000 and all sales are on credit, what is the firm’s investment in accounts receivable? How many times per year does Negus Enterprises turn over its inventory?
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What will be the firm's operating cycle?
Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35 days, and payables deferral period of 25 days. Assume that the costs of goods sold are 80% of its sales. a) What is the length of the firm's cash conversion cycle? b) If Negus's 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?
Begusarai enterprises has...Accounting question
A company has average inventory of $12 million and COGS of $16 million. Its average accounts receivable is $2 million and it had $6 million in credit sales. Its average accounts payable is $3 million and it had $16 million in purchases. What is its CCC?
Please provide correct answer accounting....
A firm has the following accounts; current liabilities = $30,000,000, sales = $245,000,000. The firm has the following ratios; current ratio = 1.76 times, inventory turnover ratio = 15.5 times, average collection period = 45 days. What is the value of the firm's cash? O $52,800,000 $6,788,069 O $9,378,078 O $31,549,104
Your boss asks you to compute the company's cash conversion cycle. Looking at the financial statements, you see that the average inventory for the year was $126,300, accounts receivable were $97,900, and accounts payable were at $115,100. You also see that the company had sales of $324,000 and that cost of goods sold was $282,000. What is your firm's cash conversion cycle? Round to the nearest day.
A firm has $5 million of inventory and $2 million of accounts receivable. Its average daily sales are $100,000 and cost of goods sold (COGS) is $80,000. The company’s payables deferral period (accounts payable divided by daily purchases) is 32 days. What is its cash conversion cycle? a. 25.5 b. 26.0 c. 43.6 d. 50.5
For the Bayer Company, the average age of accounts receivable is 60 days, the average age of accounts payable is 45 days, and the average age of inventory is 72 days. Assuming a 365-day year, what is the length of of the firm's cash conversion cycle?
A company has $20 million of inventory, $5 million of receivables,and $4 million of payables. Its annual sales revenue is $80 million,and its cost of goods sold is $60 million. What is its CCC? (120.15)

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ABC has $45 million of accounts receivable, $43 million of inventory, and $61 million of accounts payable. Its average daily sales are $814,000 and its gross profit margin is 30%. What is the firm's cash conversion cycle?