answer 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?

The question requires the determination of the cash conversion cycle. The cash conversion cycle…

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?
Suppose that James Industries has annual sales of $7.47 million, cost of goods sold of $3.95 million, average inventories of $1,300,000, and average accounts receivable of $690,000. Assuming that all of James's sales are on credit, what will be the firm's operating cycle?
What will be the firm's operating cycle ?
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What will be the firm's operating cycle?
Suppose that James Industries has annual sales of $7.47 million, cost of goods sold of $3.95 million, average inventories of $1,300,000, and average accounts receivable of $690,000. Assuming that all of James's sales are on credit, what will be the firm's operating cycle? Help me with this
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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?
If a firm has sales of $25,689,00 a year, and the average collection period for the industry is 45 days, what should this firm's accounts receivable be in the firm is comparable to the industry?
The Zocco Corporation has an inventory conversion period of 60 days, an average of collection period of 38 days, and a payable deferral period of 30 days. Assume that cost of goods sold 75% of sales. a. What is the length of the firm’s cash conversion cycle? a. Zocco’s annual sales are $3,421,875 and all sales are on credit, what is the firm’s investment in accounts receivable? b. How many times per year does Zocco turn over its inventory?

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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?