I’m trying to understand a couple of things about FreshHarvest Grocers and some market trends. First, FreshHarvest Grocers, a grocery chain that focuses on fresh, local, and sustainable products, has an inventory turnover of 15 and an accounts payable period of 52 days. Their daily credit sales are $5,000, with an average accounts receivable of $180,000. With a 360-day year, how would I go about calculating their cash cycle? And on a different note, I read that over the last 20 years, small-company stocks in the U.S. have consistently outperformed large-company stocks. Do you think this trend is likely to continue every year going forward? I'd love to hear your thoughts on why or why not.
I’m trying to understand a couple of things about FreshHarvest Grocers and some market trends. First, FreshHarvest Grocers, a grocery chain that focuses on fresh, local, and sustainable products, has an inventory turnover of 15 and an accounts payable period of 52 days. Their daily credit sales are $5,000, with an average accounts receivable of $180,000. With a 360-day year, how would I go about calculating their cash cycle? And on a different note, I read that over the last 20 years, small-company stocks in the U.S. have consistently outperformed large-company stocks. Do you think this trend is likely to continue every year going forward? I'd love to hear your thoughts on why or why not.
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 1P
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I’m trying to understand a couple of things about FreshHarvest Grocers and some market trends.
First, FreshHarvest Grocers, a grocery chain that focuses on fresh, local, and sustainable products, has an inventory turnover of 15 and an accounts payable period of 52 days. Their daily credit sales are $5,000, with an average accounts receivable of $180,000. With a 360-day year, how would I go about calculating their cash cycle?
And on a different note, I read that over the last 20 years, small-company stocks in the U.S. have consistently outperformed large-company stocks. Do you think this trend is likely to continue every year going forward? I'd love to hear your thoughts on why or why not.
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