Ahmed textile reported sales of Rs.32 million and it’s cost of goods sold is Rs. 12.8 million in 2020. The balance sheet of the company is furnished below: Ahmed Textile Balance Sheet As of December 31,2020 In Rs. Thousands Assets Liabilities and Equity Cash Rs. 1,954 Accounts payable Rs. 1,300 Account receivable 4,414 Notes payable 1,000 Inventory 1,414 Accruals 1,220 Total current assets 7,782 Total current liabilities 3,520 Long term liabilities 3,000 Total liabilities 6,520 Fixed assets 8,500 Common equity 9,762 Total assets 16,282 Total 16,282 *company is operating for 365 days a year. What is the net working capital of Ahmed Textile in 2020? What is Ahmed Textile’s Cash Conversion Cycle in 2020? What is Ahmed Textile’s Operating Cycle in 2020? Assume that the average accounts receivable days for the textile industry is 30 days. What should be the cash conversion cycle of Ahmed Textile if it wants to match its accounts receivable days to industry average of 30 days?
Ahmed textile reported sales of Rs.32 million and it’s cost of goods sold is Rs. 12.8 million in 2020. The balance sheet of the company is furnished below: Ahmed Textile Balance Sheet As of December 31,2020 In Rs. Thousands Assets Liabilities and Equity Cash Rs. 1,954 Accounts payable Rs. 1,300 Account receivable 4,414 Notes payable 1,000 Inventory 1,414 Accruals 1,220 Total current assets 7,782 Total current liabilities 3,520 Long term liabilities 3,000 Total liabilities 6,520 Fixed assets 8,500 Common equity 9,762 Total assets 16,282 Total 16,282 *company is operating for 365 days a year. What is the net working capital of Ahmed Textile in 2020? What is Ahmed Textile’s Cash Conversion Cycle in 2020? What is Ahmed Textile’s Operating Cycle in 2020? Assume that the average accounts receivable days for the textile industry is 30 days. What should be the cash conversion cycle of Ahmed Textile if it wants to match its accounts receivable days to industry average of 30 days?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Ahmed textile reported sales of Rs.32 million and it’s cost of goods sold is Rs. 12.8 million in 2020. The
Ahmed Textile
Balance Sheet
As of December 31,2020
In Rs. Thousands
|
Assets |
Liabilities and Equity |
||
|
Cash |
Rs. 1,954 |
Accounts payable |
Rs. 1,300 |
|
Account receivable |
4,414 |
Notes payable |
1,000 |
|
Inventory |
1,414 |
Accruals |
1,220 |
|
Total current assets |
7,782 |
Total current liabilities |
3,520 |
|
|
|
Long term liabilities |
3,000 |
|
|
|
Total liabilities |
6,520 |
|
Fixed assets |
8,500 |
Common equity |
9,762 |
|
Total assets |
16,282 |
Total |
16,282 |
*company is operating for 365 days a year.
- What is the net
working capital of Ahmed Textile in 2020? - What is Ahmed Textile’s Cash Conversion Cycle in 2020?
- What is Ahmed Textile’s Operating Cycle in 2020?
- Assume that the average
accounts receivable days for the textile industry is 30 days. What should be the cash conversion cycle of Ahmed Textile if it wants to match its accounts receivable days to industry average of 30 days?
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