(Cash conversion cycle) Historical data for the firm's sales, accounts receivable, inventories, and accounts payable for the Crimson Mfg. Company follow: a. Calculate Crimson's days of sales outstanding, days of payables outstanding, and days of sales in inventory for each of the 5 years. (Assume a 365-day year. Hint. Assume that the firm's cost of goods sold equals 70% of sales.) What has Crimson accomplished in its atempts to better manage its investments in account receivable and inventory? b. Calculate Crimson's cash conversion cycle for each of the 5 years. Evaluate the firm's overall management of its working capital. Assume a 365-day year. a. Calculate Crimson's days of sales outstanding, days of payables outstanding, and days of sales in inventory for each of the 5 years. Assume a 365-day year. Hint: Assume that the firm's cost of goods sold equals 70% of sales. (Round to two decimal places.) Days of sales outstanding (DSO) Data table Sales Net Receivables-Total Acounts payable Inventories-Total 2014 428 335 (Click on the following icon in order to copy its contents into a spreadsheet.) 2014 4,341 613 2015 ■ 2015 5,263 810 679 455 2016 ☐ 2016 7,983 1,090 685 651 2017 11,694 1,314 1,549 360 2017 0 2018 18,413 2,254 2,469 342 2018 ☐ - X
(Cash conversion cycle) Historical data for the firm's sales, accounts receivable, inventories, and accounts payable for the Crimson Mfg. Company follow: a. Calculate Crimson's days of sales outstanding, days of payables outstanding, and days of sales in inventory for each of the 5 years. (Assume a 365-day year. Hint. Assume that the firm's cost of goods sold equals 70% of sales.) What has Crimson accomplished in its atempts to better manage its investments in account receivable and inventory? b. Calculate Crimson's cash conversion cycle for each of the 5 years. Evaluate the firm's overall management of its working capital. Assume a 365-day year. a. Calculate Crimson's days of sales outstanding, days of payables outstanding, and days of sales in inventory for each of the 5 years. Assume a 365-day year. Hint: Assume that the firm's cost of goods sold equals 70% of sales. (Round to two decimal places.) Days of sales outstanding (DSO) Data table Sales Net Receivables-Total Acounts payable Inventories-Total 2014 428 335 (Click on the following icon in order to copy its contents into a spreadsheet.) 2014 4,341 613 2015 ■ 2015 5,263 810 679 455 2016 ☐ 2016 7,983 1,090 685 651 2017 11,694 1,314 1,549 360 2017 0 2018 18,413 2,254 2,469 342 2018 ☐ - X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:(Cash
conversion cycle) Historical data for the firm's sales, accounts receivable, inventories, and accounts payable for the Crimson Mfg. Company follow:
a. Calculate Crimson's days of sales outstanding, days of payables outstanding, and days of sales in inventory for each of the 5 years. (Assume a 365-day year. Hint: Assume that the firm's cost of goods sold equals 70% of
sales.) What has Crimson accomplished in its atempts to better manage its investments in account receivable and inventory?
b. Calculate Crimson's cash conversion cycle for each of the 5 years. Evaluate the firm's overall management of its working capital. Assume a 365-day year.
a. Calculate Crimson's days of sales outstanding, days of payables outstanding, and days of sales in inventory for each of the 5 years. Assume a 365-day year. Hint: Assume that the firm's cost of goods sold equals 70% of
sales. (Round to two decimal places.)
Days of sales outstanding (DSO)
Data table
2014
Sales Net
Receivables-Total
Acounts payable
Inventories-Total
(Click on the following icon in order to copy its contents into a spreadsheet.)
2014
4.341
613
428
335
Print
2015
5,263
810
2015
679
455
2016
7,983
1,090
685
651
2016
Done
2017
11,694
1,314
1,549
360
2017
2018
18,413
2,254
2,469
342
-
2018
X
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