Cash conversion cycleChristie Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Christie's 2012 sales (all on credit) were$287,000; its cost of goods sold is 80% of sales; and it earned a net profit of 8%, or $22,960. It tumed over its inventory 5 times during the year, and its DSO was 39 days. The firm had fixedassets totaling $40,000. Christie's payables deferral period is 50 days. Assume 365 days in year for your calculations.a. Calculate Christie's cash conversion cyde. Round your answer to two decimal places.daysb. Assuming Christie holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. Round your answer to two decimal places.Total assetsROAt. Suppose Christle's managers belleve that the inventory turnover can be raised to 8.4 times. What would Christie's cash conversion cyde, total assets turnover, and ROA have been iF theInventory turnover had been 8.4 for 20127Cash conversion cycledaysTotal assetsROA

Cash conversion cycle is representing that how long it takes for an organization to convert it's…

Answered: Cash conversion cycle Christie…

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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Serven Corporation has estimated its accrual-basis revenue and expenses for June 20X1 and would like your help in estimating cash disbursements. Selected data from these estimated amounts are as follows: Sales $ 700,000 Gross profit (as a percent of sales) 30 % Increase in trade accounts receivable for the month $ 20,000 Change in accounts payable during month 0 Increase in inventory during month $ 10,000 Variable selling, general, and administrative expenses include a charge for uncollectible accounts of 1% of sales. Total selling, general, and administrative expenses are $71,000 per month plus 15% of sales. Depreciation expense of $40,000 per month is included in fixed selling, general, and administrative expense. Required: On the basis of the preceding data, what are the estimated cash disbursements from operations for June 20X1?
The FMT Corporation is trying to determine the effect of its inventory turnover ratio and days salesoutstanding (DSO) on its cash flow cycle. FMT sales last year (all on credit) were ₱150,000, and it earneda net profit of 6%, or ₱9,000. It turned over its inventory 5 times during the year, and its DSO was 36.5days. The firm had fixed assets totalling ₱35,000. FMT payables deferral period is 40 days.a. Calculate FMT’s cash conversion cycle.b. Assuming FMT holds negligible amounts of cash and marketable securities, calculate its totalassets turnover and ROA.c. Suppose FMT Corp managers believe that the inventory turnover can be raised to 7.3 times.What would FMT’s cash conversion cycle, total assets turnover, and ROA have been if theinventory turnover had been 7.3 for the year?
Bajaj Ltd. reported the following statistics and results for 2020: Net operating income Return on sales $ 54,000 Asset turnover 2.5 Residual income $ 10,880 Required: 1. What was the value of Bajaj's average operating assets in 2020? Average operating assets 2 If the required rate of return is 7% what Is the ROI? (Round your answer to 2 decimal places.) ROI
Thornton Universal Sales' cost of goods sold (COGS) average $2,000,000 per month, and it keeps inventory equal to 50% of its monthly COGS on hand at all times. Using a 365-day year, what is its inventory conversion period? a. 15.2 days b. 13.0 days c. 11.7 days d. 16.7 days e. 14.4 days
Pomelo Corporation has estimated its activity for December 2014. Selected data from these estimatedamounts are as follows:Sales = P350,000Gross profit (based on sales) = 30%Increase in trade accounts receivable during the month = 10,000Change in accounts payable during the month = 0Increase in inventory during the month = 5,000  Variable selling, general & administrative expenses (S,G,& A) includes for uncollectible accounts of 1%of sales. Total S,G,& A is P35,000 per month plus 15% of sales. Depreciation expense of P20,000 per month is included in fixed S,G,&,A. 15. On the basis of the above data, what are the estimated cash receipts from operations for December?a. P336,500 b. P340,000 c. P346,500 d. P350,000 16. On the basis of the above data, what are the estimated cash disbursements from operations for December?a. P309,500 b. P313,000 c. P314,000 d. P318,000
Serven Corporation has estimated its accrual-basis revenue and expenses for June 2017 and would like your help in estimating cash disbursements. Selected data from these estimated amounts are as follows: Sales: $700,000 Gross Profit (based on sales): 30% Increase in trade accounts recievable for the month: $20,000 Change in accounts payable during month: $0 Increase in inventory during month: $10,000 Variable selling, general, and administrative expenses include a charge for uncollectible accounts of 1% of sales. Total selling, general, and administrative expenses are $71,000 per month plus 15% of sales. Depreciation expense of $40,000 per month is included in fixed selling, general, and administrative expense. Required: On the basis of the preceding data, what are the estimated cash dispursements from operations for June?
For the year ended December 31, 2022, Settles Incorporated earned an ROI of 10.5%. Sales for the year were $9 million, and average asset turnover was 2.1. Average stockholders' equity was $2.8 million. Required: Calculate Settles Incorporated's margin and net income. Note: Round "Margin" answer to 1 decimal place. Enter the net income answer in dollars, i.e., $5 million should be entered as 5,000,000. Calculate Settles Incorporated's return on equity. Note: Round your answer to 1 decimal place.
Libscomb Technologies' annual sales are $6,997,444 and all sales are made on credit, it purchases $3,879,449 of materials each year (and this is its cost of goods sold). Libscomb also has $530,851 of inventory, $490,754 of accounts receivable, and $417,441 of accounts payable. Assume a 365 day year. What is Libscomb’s Receivables Turnover?
Charlie’s Cycles Inc. has $110 million in sales. The companyexpects that its sales will increase 5% this year. Charlie’s CFO uses a simple linearregression to forecast the company’s inventory level for a given level of projected sales. On the basis of recent history, the estimated relationship between inventories and sales (inmillions of dollars) is as follows:Inventories = $9 + 0.0875(Sales)Given the estimated sales forecast and the estimated relationship between inventories andsales, what are your forecasts of the company’s year-end inventory level and its inventoryturnover ratio?
Libscomb Technologies' annual sales are $5,790,872 and all sales are made on credit, it purchases $3,221,342 of materials each year (and this is its cost of goods sold). Libscomb also has $539,653 of inventory, $498,477 of accounts receivable, and $416,602 of accounts payable. Assume a 365 day year. What is Libscomb’s Inventory Period (in days)?
Use the information below to compute the number of days in the cash conversion cycle for Apple ($ millions). Round calculations to the nearest whole day. Accounts payable, end of year $49,049 Inventory, end of year . $ 4,855 Accounts receivable, net, end of year 17,874 Net sales 229,234 Cost of goods sold . 141,048

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