Ait Limited has annual credit sales of Ghc5 million and cost of sales of GHC1.8 million. The company’s current assets consist of inventory and trade receivables. Current liabilities consist of accounts payables and an overdraft facility with an average interest rate of 10% per annum. The company gives 60 days credit to its customers and is allowed an average of 30 days credit by trade suppliers. The company has an operating cycle of 90 days. Current ratio of Ait Ltd 1.5:1 and the Cost of long-term finance to Ait Ltd is 12% per annum. Calculate the Size of the overdraft of Ait Ltd, Net working capital of the company and Total cost of financing its current assets?

Q: A company has credit turnover of NOK 10 million this year. 31.12.x1 this year, trade receivables…

A: Average Credit time = Average Accounts receivable/Total Credit Sales*No. of days   Average accounts…

Q: Oral Roberts Dental Supplies has annual sales of $5,760,000. Ninety percent are on credit. The firm…

A: Average collection period means the period during which accounts receivables are collected from the…

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A: Interest rate= Prime rate +4% = 8% + 4%= 12% Interest is calculated for the number of days on…

Q: Grab Co. has a normal operating cycle of 60 days. The average age of inventory is 30 days. The…

A: Normal Operating cycle = Age of inventory + Age of Debtors Also, 360/ age of debtors = debtors…

Q: ABC Co has sales of $76m for the previous year. Receivables days are 58 and receivables are financed…

A: Accounts Receivables represents the amount the customers owe to the corporation on the account of…

Q: A 33- day days sales outstanding is maintained by the Bebop Corporation. Each day, the company…

A: Days sales outstanding is one of important ratio used in business to evaluate efficiency of…

Q: A firm has $400,000 in credit sales and $100,000 in accounts receivable.Compute accounts receivable…

A:

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A: Given that, Opening balance of accounts receivables = P500000 Sales for the month of Jan = P1200000…

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A: Prime rate The current interest rate charged by the financial institution to its customers is known…

Q: Kamal Co. has an average collection period (ACP) of 30 days and an operating cycle of 170 days. It…

A: Accounts receivable account is an asset account and it contains the amounts of debtors. Whereas the…

Q: The following financial information relates to XYZ Company: Inventory turnover: 5 times Accounts…

A: Operating cycle measures the time taken by a company to convert its inventory into cash. Operating…

Q: d be employed. Only one proposal has so far been put forward concerning the management of trade…

A: 1. Credit policies are critical documents for nearly every organization, but especially for those…

Q: A CARDBOARD BOX FACTORY pays its suppliers 40 days after making the purchase and receiving the…

A: The question is related to Operating cycle in Working Capital Management.   Since you have posted a…

Q: Abaca Company's accounts receivable is P240,000 at the beginning of the year and 280,000 at the end…

A: 1. 6× means 6 times. Accounts Receivables turnover ratio is 6               times.  2. Total Sales…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: the line of credit is a pre-approved limit offered by financial institutions, banks, etc, you can…

Q: The Daisy Company had net credit sales of $880,000 for the year. Cash sales for the year were…

A: DAYS SALES IN RECEIVABLEDays Sales to Receivable is a ratio between 360/365 Days and Receivable…

Q: Calvani, Inc., has a cash cycle of 43.5 days, an operating cycle of 63 days, and an inventory period…

A: Variables in the question:Cash cycle=43.5 daysOperating cycle=63 daysInventory period=27 days Cost…

Q: Ait Limited has annual credit sales of Ghc5 million and cost of sales of GHC1.8 million. The…

A: Overdraft could be a credit extension from a bank to its bank account holders. The credit is…

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A: Cook security systems has line of credit = $37500 Annual charge rate = 4% On October 1, Opening…

Q: (16-11) Cash Conversion Negus Enterprises has an inventory conversion period of 50 days, an average…

A: Number of days 365 Days Divided by:  Average collection period 35 Days   Accounts receivable…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Solution- Interest rate = 6% +4% = 10%   Rate of interest charged each day = 10% / 360 = 0.02778%…

Q: Al Sharif Company's Average Accounts Receivables is OMR 360,000 and total Sales is OMR 1,200,000.…

A: Credit sale=Total sale×100-Cash sale %=OMR 1,200,000×100-40%=OMR 720,000

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Given, Cock security system has $37500 line of credit  Annual percentage rate  = 4% october pmt -…

Q: 10.Using the following information taken from the first week in November operating and financial…

A: “Since you have posted multiple questions, we will provide the solution only to the first five…

Q: AKM Limited has annual credit sales of $20 million with an average collection period is three…

A: The genuine interest rate connected with an asset or loan is described by the effective yearly…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: The current balance will be a function of opening balance, fresh borrowing, less repayment and the…

Q: What will be the net change in the cash conversion cycle, assuming a 365-day year?

A: Cash conversion cycle (CCC) refers to the time period (in days) taken by a company to convert its…

Q: If Cactus, Inc. has annual sales of $83,000, average accounts payable of $30,000, and average…

A: Sales = $83000 Account payable = $30000 Accounts receivable = $25000

Q: The following forecasted information was taken from the books of Pakhama Enterprises.The following…

A: Budget: The budget is a financial plan and estimation of revenue and expenses and primary financial…

Q: Some data regarding the financial enterprise are as follows; - The company collects its sales 25% in…

A: A cash budget is an estimate of a company's cash flows for a given time span, such as weekly,…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Calculation of new balance are as follows

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: New balance  = balance  on 31 October  + interest

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: DatesNo. of…

Q: The following forecasted information was taken from the books of Pakhama Enterprises.The following…

A:

Q: Last year, the sales of OSP Inc. Amounted to R5 million and its most recent statement of financial…

A: B. Net benefit of approximately R13,000.Explanation:To determine the net benefit or cost of the…

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.