Cash conversion cycle American Products is concerned about managing cash efficiently. On the average, inventories have an age of 81 days, and accounts receivable are collected in 34 days. Accounts payable are paid approximately 30 days after they arise. The firm has annual sales of about $33 million. Cost of goods sold are $21 million, and purchases are $16 million. a Calculate the firm's operating cycle. D. Calculate the firm's cash conversion cycle. c. Calculate the amount of resources needed to support the firm's cash conversion cycle. d. Discuss how management might be able to reduce the cash conversion cycle. a. American Products' operating eycle, OC, is days. (Round to the nearest whole number.)

Cash conversion cycle American Products is concerned about managing cash efficiently. On the average, inventories have an age of 81 days, and accounts receivable are collected in 34 days. Accounts payable are paid approximately 30 days after they arise. The firm has annual sales of about $33 million. Cost of goods sold are $21 million, and purchases are $16 million. a Calculate the firm's operating cycle. D. Calculate the firm's cash conversion cycle. c. Calculate the amount of resources needed to support the firm's cash conversion cycle. d. Discuss how management might be able to reduce the cash conversion cycle. a. American Products' operating eycle, OC, is days. (Round to the nearest whole number.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

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Cash conversion cycle American Products is concerned about managing cash efficiently. On the average, inventories have an age of 81 days, and accounts
receivable are collected in 34 days. Accounts payable are paid approximately 30 days after they arise. The firm has annual sales of about $33 million. Cost of goods
sold are $21 million, and purchases are $16 million.
a. Calculate the firm's operating cycle.
b. Calculate the firm's cash conversion cycle
c. Calculate the amount of resources needed to support the firm's cash conversion cycle.
d. Discuss how management might be able to reduce the cash conversion cycle.
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Question 46 An analyst has recently been hired to improve the performance of SL Energy Corporation, which has been experiencing a severe cash shortage. As one part of your analysis, the analyst wants to determine the firm’s cash conversion cycle. Using the following information and a 365-day year: Current inventory = $160,000; Annual sales = $1,095,000; Accounts receivable = $180,000; Accounts payable = $36,000; Total annual purchases = $730,000. Calculate the firm’s inventory conversion cycle. 18 days 70 days 75 days 80 days Question 47 Based on information from Question 46, Calculate the firm’s receivables collection period. 60 days 70 days 80 days 90 days Question 48 Based on information from Question 46, Calculate the firm’s payables deferral period. 18 days 36 days 75 days 90 days Question 49 Based on information from Question 46~48,…
Cash conversion cycle American Products is concerned about managing cash effi-ciently. On average, inventories have an age of 80 days, and accounts receivable are collected in 40 days. Accounts payable are paid approximately 30 days after they arise. The firm has annual sales of about $30 million. Goods sold total $20 million, and purchases are $15 million. c. Calculate the amount of resources needed to support the firm’s cash conversion cycle?
Compute Cash Conversion Cycle for Competing Firms Kellogg's Company and General Mills compete in the consumer packaged goods (CPG) sector. Refer to the following 2018 financial data for the two companies to answer the requirements. $ millions Total revenue Cost of sales and services Average accounts receivable Average inventory Average accounts payable K GIS $14,597.0 $16,790.0 9,871.0 10,312.9 1,382.0 2,607.0 2,324.0 1,562.9 2,348.0 3,483.0 Note: Complete the entire question in Excel and format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places. a. Compute the following measures for both companies. 1. Days sales outstanding (DSO) Company K GIS DSO 0 0 2. Days inventory outstanding (DIO) Company K GIS DIO 0 0 3. Days payable outstanding (DPO) Company K GIS DPO 0 0 4. Cash conversion cycle (CCC) Company K GIS CCC 0 0
Cash management is a very important function of managers. Companies need to manage their operations in a way that they can sustain growth and yet not run out of cash. Consider the case of the Extensive Enterprise Inc.: Extensive Enterprise Inc. has forecasted sales of $30,000,000 for next year and expects its cost of goods sold (COGS) to remain at 60% of sales. Currently, the firm holds $2,900,000 in inventories, $1,800,000 in accounts receivable, and $2,700,000 in accounts payable. A. Approximately how long does it take Extensive Enterprise to convert its raw materials to its finished products and then to sell those goods? (Note: In all calculations, assume that there are 365 days in a year.) 55.87 days 44.11 days 58.81 days 64.69 days B. On average, it takes from the time a sale is made until the time cash is collected from customers. (Calculation required) C. Extensive Enterprise relies on customer credit when it buys raw…
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Cash management is a very important function of managers. Companies need to manage their operations in a way that they can sustain growth and yet not run out of cash.Consider the case of the Red Hamster Manufacturing Corporation: Search tiRed Hamster Manufacturing Corporation has forecasted sales of $ 30,000,000 for next year and expects its cost of goods sold (COGS) to remain at 80% of sales. Currently, the firm holds $3,100,000 in inventories, $2,300,000 in accounts réceivable, and $2,500,000 in accounts payable.Approximately how long does it take Red Hamster Manufacturing to convert its raw materials to its finished products and then to sell those goods? (Note: Use 365 days as the length of a year in all calculations, and round all values to two decimal places.)
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Want to give you a correct answer
Compute Cash Conversion Cycle for Competing Firms Kellogg’s Company and General Mills compete in the consumer packaged goods (CPG) sector. Refer to the following 2018 financial data for the two companies to answer the requirements. $ millions K GIS Total revenue $14,575.0 $16,768.0 Cost of sales and services 9,849.0 10,312.9 Average accounts receivable 1,382.0 2,585.0 Average inventory 2,302.0 1,562.9 Average accounts payable 2,348.0 3,461.0 Note: Complete the entire question in Excel and format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places. a. Compute the following measures for both companies. 1. Days sales outstanding (DSO) Company DSO K Answer GIS Answer 2. Days inventory outstanding (DIO) Company DIO K Answer GIS Answer 3. Days payable outstanding (DPO) Company DPO K Answer GIS Answer 4. Cash conversion cycle (CCC) Company…
mni.3
Please revise question 46 to get an answer in this options An analyst has recently been hired to improve the performance of SL Energy Corporation, which has been experiencing a severe cash shortage. As one part of your analysis, the analyst wants to determine the firm’s cash conversion cycle. Using the following information and a 365-day year: Current inventory = $160,000; Annual sales = $1,095,000; Accounts receivable = $180,000; Accounts payable = $36,000; Total annual purchases = $730,000. Calculate the firm’s inventory conversion cycle. 18 days 70 days 75 days 80 days Based on information from Question 46~48, Calculate the firm’s cash conversion cycle (CCC). 122 days 129 days 147 days 128 days

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