The components of the operating cycleProper management of a firm’s working capital is vital and challenging due to the______(pick either uncertainty or certainty.)and________(Pick either synchronized timing or unsynchronized timing.) between a firm’s cash inflows and outflows. Consider this data for Galaxy Wholesalers Incorporated and use it to complete the table:Selected Financial Data for Galaxy Wholesalers Incorporated Average cash$32,813Average accounts payable$440,000Average accounts receivable$787,500Average inventories$393,750Average cash sales$2,625,000Average credit sales$7,875,000Average cost of goods sold$4,725,000Average number of days per year365 daysInventory conversion period30.42 daysPayables deferral period____.____daysReceivables conversion period____.____daysCash conversion cycle____.____days

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The components of the operating cycle

Proper management of a firm’s working capital is vital and challenging due to the______(pick either uncertainty or certainty.)and________(Pick either synchronized timing or unsynchronized timing.) between a firm’s cash inflows and outflows.

Consider this data for Galaxy Wholesalers Incorporated and use it to complete the table:

Selected Financial Data for Galaxy Wholesalers Incorporated
Average cash	$32,813
Average accounts payable	$440,000
Average accounts receivable	$787,500
Average inventories	$393,750
Average cash sales	$2,625,000
Average credit sales	$7,875,000
Average cost of goods sold	$4,725,000
Average number of days per year	365 days
Inventory conversion period	30.42 days
Payables deferral period	____.____days
Receivables conversion period	____.____days
Cash conversion cycle	____.____days

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