Accounting calculate a. b. c. Houston Corporation has an inventory conversionperiod of 60 days (DII), a receivables collectionperiod of 36 days (DSO), and a payables deferralperiod of 24 days (DPO).A. What is the length of the company's cashconversion cycle?B. If Houston's annual sales are $3,960,000 and allsales are on credit, what is the average balance inaccounts receivable?C. How many times per year does Houston turn overits inventory?D. What would happen to Houston's cash conversioncycle if, on average, inventories could be turnedover eight times a year?

Question A):• Step 1: Use the formula: CCC = DII + DSO − DPO• Step 2: Add DII and DSO• Step 3:…

Answered: Houston Corporation has an inventory…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter16: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P

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еВook Zane Corporation has an inventory conversion period of 90 days, an average collection period of 34 days, and a payables deferral period of 48 days. Assume 365 days in year for your calculations. a. What is the length of the cash conversion cycle? Round your answer to two decimal places. days b. If Zane's annual sales are $3,454,540 and all sales are on credit, what is the investment in accounts receivable? Do not round intermediate calculations. Round your answer to the nearest cent. $ c. How many times per year does Zane turn over its inventory? Assume that the cost of goods sold is 75% of sales. Use sales in the numerator to calculate the turnover ratio. Do not round intermediate calculations. Round your answer to two decimal places.
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Zane Corporation has an inventory conversion period of 48 days, an average collection period of 33 days, and a payables deferral period of 33 days. Assume 365 days in year for your calculations. What is the length of the cash conversion cycle? Round your answer to two decimal places. If Zane's annual sales are $4,137,145 and all sales are on credit, what is the investment in accounts receivable? Do not round intermediate calculations. Round your answer to the nearest cent. How many times per year does Zane turn over its inventory? Assume that the cost of goods sold is 75% of sales. Use sales in the numerator to calculate the turnover ratio. Do not round intermediate calculations. Round your answer to two decimal places.
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