Question 3ABC Company Ltd. has annual revenues of $750 million and annual cost of goodssold of $450 million. Annual cash flows from operations are $51 million, while dailycredit sales were $163,548. It published its annual report for the financial year 2021-22 ending, with the following balance sheet items as at 31 march 2022:Ending inventory: $82 millionEnding accounts receivable: $56 millionEnding accounts payable: $43 million●ABC Co. Ltd. treasurers forecast the following balance pattern for monthlycollections:●●●Month 0: 5%Month 1: 40%Month 2: 35%Month 3: 15%Month 4: 5%Required:a) Calculate the Cash Conversion Cycle (CCC) for the company and discussmeasures the company could adopt to shorten its CCC.b) What percentage of outstanding sales proceeds are yet to be collected asreceivables 3 months after the sales were invoiced?

Cash conversion cycle = Days Inventory Outstanding + Days Sales Outstanding – Days Payables…

Answered: Required: a) Calculate the Cash…

Required: a) Calculate the Cash Conversion Cycle (CCC) for the company and discuss measures the company could adopt to shorten its CCC.

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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