Santana Rey's two departments, Computer Consulting Services and Computer Workstation Furniture Manufacturing, have each been profitable for Business Solutions. Santana has heard of the cash conversion cycle and wants to use it as another performance measure for the workstation manufacturing department. Data below are for the most recent two quarters. Days' sales in accounts receivable 28 34 Days' sales in inventory Days' payable outstanding 1st Quarter 2nd Quarter days days days Required: 40 30 days 33 days 37 days
Santana Rey's two departments, Computer Consulting Services and Computer Workstation Furniture Manufacturing, have each been profitable for Business Solutions. Santana has heard of the cash conversion cycle and wants to use it as another performance measure for the workstation manufacturing department. Data below are for the most recent two quarters. Days' sales in accounts receivable 28 34 Days' sales in inventory Days' payable outstanding 1st Quarter 2nd Quarter days days days Required: 40 30 days 33 days 37 days
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Santana Rey's two departments, Computer Consulting Services and Computer Workstation Furniture Manufacturing, have
each been profitable for Business Solutions. Santana has heard of the cash conversion cycle and wants to use it as
another performance measure for the workstation manufacturing department. Data below are for the most recent two
quarters.
1st Quarter 2nd Quarter
days
days
days
Days' sales in accounts receivable 28
Days' sales in inventory
34
Days' payable outstanding
40
30 days
33 days
37 days
Required:
1&2. Compute cash conversion cycle for the first quarter and second quarter.
3. Did cash conversion cycle improve or worsen from the first to the second quarter?
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