Changing cash conversion cycle Camp Manufacturing turns over its inventory 5 times each year, has an average payment period of 37 days, and has an average collection period of 66days. The firm has annual sales of $3.7 million and cost of goods sold of $2.1 million. (Use a 365-day year.)a. Calculate the firm's operating cycle and cash conversion cycle.b. What is the dollar value of inventory held by the firm?c. If the firm could reduce the average age of its inventory from 73 days to 63 days, by how much would it reduce its dollar investment in working capital?a. Camp's operating cycle, OC, isdays. (Round to the nearest whole number.)

a. Operating Cycle and Cash Conversion Cycle 1. Calculate the Inventory Turnover Ratio: The formula…

Answered: Changing cash conversion cycle Camp…

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.
A company is launching a new sales initiative and expects sales of $598,427 during the first year. To prepare for this, they plan to acquire 35 days worth of inventory. If their gross profit margin is 29%, how much inventory must they acquire as part of their initial investment? Enter your answer as a monetary amount rounded to four decimal places, but without the currency symbol. For example, if your answer is $90.1234, enter 90.1234 Type your answer...
Berry Manufacturing turns over its inventory 8 times each year, has an Average Payment Period of 35 days and has an Average Collection Period of 60 days. The firm’s annual sales are $3.5 million. Assume there is no difference in the investment per dollar of sales in inventory, receivable, and payables and that there is a 365-day year. A. Calculate the Firm’s Operating Cycle. B. Calculate the Firm’s Cash Conversion Cycle. C. Calculate the Firm’s Daily Cash Operating Expenditure.
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)
Apple company has the following information, Annual sales= 12 Million Cost of goods sold = 65% of sales Purchases= 60% of Cost of goods sold AAI = 65 days ACP = 45 days APP = 33 days Find : 1- The cash conversion cycle (CCC) 2- The operating cycle (OC) 3- The resources invested (operating assets)
Forecasted cash receipts and expenditure for the period August to October are as follows: Cash Receipts Expenditure $ $ 60,000 58,000 July August September October 54000 68,000 90,000 30,000 44,000 Additional information provided: ✓ Expenditure for the period July to October includes monthly depreciation of $5,000. ✓ Payment for the cash related expenditure would be 40% in the month of purchase, the balance being paid the following month. The company intends to sell equipment valued at $25,000 in September. Insurance of $25,000 is payable in December. Opening cash balance as at August 1, $18,800. Required: Prepare a monthly Cash Budget for the period August to October 2021.
A firm with annual sales of $8,500,000 increases its inventory turnover from 3.0 to 4.0. How much would the company save annually in interest expense if the cost of carrying the inventory is 6 percent? Round your answer to the nearest dollar.
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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
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
As an operations management consultant, you have been asked to evaluate a furniture manufacturer's cash-to-cash conversion cycle under the following assumptions: sales of $23.6 million, cost of goods sold of $19.5 million, 50 operating weeks a year, total average on-hand inventory of $2,300,000, accounts receivable equal to $2,440,000, and accounts payable of $3,710,000. What is the cash-to-cash conversion cycle in weeks? Do not round intermediate calculations. Round your answer to one decimal place. week(s) What recommendations can you make to improve performance? -Select- ✓inventory weeks of supply and -Select- ✓accounts receivable weeks of supply or -Select- are ways to improve overall firm performance. accounts payable weeks of supply

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