Average inventory = P75,000 Annual sales = P600,000 Annual cost of goods sold = Average accounts receivable = Average accounts payable = P360,000 P160,000 P25,000
Average inventory = P75,000 Annual sales = P600,000 Annual cost of goods sold = Average accounts receivable = Average accounts payable = P360,000 P160,000 P25,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Your consulting firm was recently hired to improve the performance of RP Inc, which is highly profitable but has been experiencing cash shortages due to its high growth rate. As one part of your analysis, you want to determine the firm’s cash conversion cycle. Using the following information and a 365-day year, what is the firm’s present cash conversion cycle?
Transcribed Image Text:Average inventory =
P75,000
Annual sales =
P600,000
P360,000
Annual cost of goods sold =
Average accounts receivable =
Average accounts payable =
P160,000
P25,000
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