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

Problem 1PS

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Watts Industries' carries 87 days in Inventory, and collects its Accounts Receivable in 75 days. If the firm pays its Accounts Payable in 26 days, what is Watts' Cash Conversion Cycle?
Problem 2. Lexberville Company expects to make even monthly cash payments of P166,666.67 during the year. The average return on money market placements is 8% p.a. and payment for cash transfer is expected to be P242 per transaction. Requirements: 5. Transaction cost at the optimum cash balance. (round to nearest whole number) 6. Transaction cost at P40,000 cash balance. 7. Opportunity cost at P500,000 cash balance.
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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.)
Cash conversion cycle Consider the case of Jealous Leopard Trading Company: Jealous Leopard Trading Company is a mature firm that has a stable flow of business. The following data was taken from its financial statements last year: Annual sales $10,200,000 Cost of goods sold $8,160,000 Inventory $3,100,000 Accounts receivable $2,200,000 Accounts payable $2,500,000 Leopard Trading’s CFO is interested in determining the length of time funds are tied up in working capital. Use the information in the preceding table to complete the following table. (Note: Use 365 days as the length of a year in all calculations, and round all values to two decimal places for the next four parts.) Inventory conversion period (days) Average collection period (days) Payables deferral period (days) Cash conversion cycle (days)
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…
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Problem B: Cash Conversion CycleABC Corporation has P5,000,000 in inventory and P2,000,000 in accounts receivable. Its average daily sales are P100,000. Thecompany has P1,500,000 in accounts payable. Its average daily purchases are P50,000.Required: 1. Days it takes to convert inventory to cash2. Days payable outstanding3. Cash Conversion Cycle in days
I. Provide an answer with solution
Titus spider toys was the manufacturer of spider toys and has huge market share with tremendous increase in its sales. In the recent times it was hard for the company to calculate its cash conversion cycle as the business grows, many receivables was not received on time. Advise the company with its cash cycle in days. Accounts receivables=172 Days Inventory Outstanding =15 Days Payable Outstanding=4 Average Sales per Day = 17
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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