Can you help me solve this general accounting problem with the correct methodology? Calculate the firm's operating cycle and cash conversion cycle given the followinginformation:Average Inventory: $45,000Average Accounts Receivable: $60,000.•Annual Sales: $360,000Average Accounts Payable: $40,000•Cost of Goods Sold: $216,000

Step 1: Detailed explanation of Operating Cycle and Cash Conversion CycleThe Operating Cycle is the…

Answered: Calculate the firm's operating cycle…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 12P

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Smoltz Company reported the following information for the current year: cost of goods sold, $252,500; increase in inventory, $21,700; and increase in accounts payable, $12,200. What is the amount of cash paid to suppliers that Smoltz would report on its statement of cash flows under the direct method? a. $218,600 c. $262,000 b. $243,000 d. $286,400
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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Given the following, what is the firm's (a) operating cycle, and (b) cash conversion cycle?
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Subject: financial accounting
What is the cash conversion cycle for ABC corporation using the following information: sales: 10,000,000 cost of goods:7, 500,000 accounts receivable: 1, 232, 877 inventory turnover ratio: 10 payable deferred period:40
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FMT Trading Inc. has the following financial data: Annual sales 10,000,000Cost of goods sold 6,000,000Inventory 2,547,945Accounts receivable 1,643,836Accounts payable 1,200,000 a. What is the firm’s cash conversion cycle?b. Provide interpretations of the cash conversion cycle period of the firm.
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ABC Inc. has the following data. What is the firm's cash (conversion) cycle? Inventory Conversion Period = 38 days Receivables Collection Period = 19 days Payables Deferral Period = 26 days
Direct Furnishings Inc. has the following data:Annual sales $10,000,000Cost of goods sold 6,000,000Inventory 2,547,945Accounts receivable 1,643,836Accounts payable 1,200,000What is the firm’s cash conversion cycle?

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Calculate the firm's operating cycle and cash conversion cycle given the following information: Average Inventory: $45,000 Average Accounts Receivable: $60,000 . • Annual Sales: $360,000 Average Accounts Payable: $40,000 • Cost of Goods Sold: $216,000