General Accounting Question Winston Inc. is trying to determine the effect of its inventoryturnover ratio and days sales outstanding on its cashconversion cycle. Winston's 2015 sales (all on credit) were$110,000 and its cost of goods sold was 75% of sales. Itturned over its inventory 8.6 times during the year. Itsreceivables balance at the end of the year was $13,144.94and its payables balance at the end of the year was$7,401.74. Using this information calculate the firm's cashconversion cycle. Round your answer to the nearest whole.Round the days amounts in your intermediate calculationsto the nearest whole day. Do not round other intermediatecalculations.

Step 1:- Introduction to the Cash conversion cycleThe cash conversion cycle is generally calculated…

Answered: Winston Inc. is trying to determine the…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 3P

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Winston Inc. is trying to determine the effect of its inventory turnover ratio and days sales outstanding on its cash conversion cycle. Winston's 2015 sales (all on credit) were $127,000 and its cost of goods sold was 75% of sales. It turned over its inventory 8.21 times during the year. Its receivables balance at the end of the year was $13,176.01 and its payables balance at the end of the year was $7,390.04. Using this information calculate the firm's cash conversion cycle. Do not intermediate calculations. Round your answer to the nearest whole number. days
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Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Chastain's 2016 sales (all on credit) were $285000; its cost of goods sold is 80% of sales; and it earned a net profit of 6%, or $17100. It turned over its inventory 6 times during the year, and its DSO was 35 days. The firm had fixed assets totaling $37000. Chastain's payables deferral period is 40 days. Assume 365 days in year for your calculations. A. Calculate Chastain's cash conversion cycle. Round your answer to two decimal places. Do not round intermediate calculations. B.Assuming Chastain holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. Round your answers to two decimal places. Do not round intermediate calculations. C.Suppose Chastain's managers believe that the inventory turnover can be raised to 8.9 times. What would Chastain's cash conversion cycle, total assets…
Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Chastain's 2016 sales (all on credit) were $285000; its cost of goods sold is 80% of sales; and it earned a net profit of 6%, or $17100. It turned over its inventory 6 times during the year, and its DSO was 35 days. The firm had fixed assets totaling $37000. Chastain's payables deferral period is 40 days. a.Calculate Chastain's cash conversion cycle. Round your answer to two decimal places. Do not round intermediate calculations. b.Assuming Chastain holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. Round your answers to two decimal places. Do not round intermediate calculations. C.Suppose Chastain's managers believe that the inventory turnover can be raised to 8.9 times. What would Chastain's cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover…
Quantitative Problem: Winston Inc. is trying to determine the effect of its inventory turnover ratio and days sales outstanding on its cash conversion cycle. Winston's 2015 sales (all on credit) were $123,000 and its cost of goods sold was 75% of sales. It turned over its inventory 8.52 times during the year. Its receivables balance at the end of the year was $13,118.63 and its payables balance at the end of the year was $7,390.82. Using this information calculate the firm's cash conversion cycle. Do not intermediate calculations. Round your answer to the nearest whole number. days
Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Chastain's 2018 sales (all on credit) were $106,000; its cost of goods sold is 80% of sales; and it earned a net profit of 4%, or $4,240. It turned over its inventory 6 times during the year, and its DSO was 40 days. The firm had fixed assets totaling $27,000. Chastain's payables deferral period is 35 days. Assume 365 days in year for your calculations. Calculate Chastain's cash conversion cycle. Do not round intermediate calculations. Round your answer to two decimal places. days Assuming Chastain holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. Do not round intermediate calculations. Round your answers to two decimal places. Total assets turnover ROA % Suppose Chastain's managers believe that the inventory turnover can be raised to 9.4 times. What would…
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Spritzer Company made sales of $29,750 million in 2018. The cost of goods sold for the year totaled $11,900 million. At the end of 2017, Malt's inventory stood at $1,200 million, and Spritzer ended 2018 with an inventory of $1,600 million. Compute Malt's gross profit percentage and rate of inventory turnover for 2018.
The FMT Corporation is trying to determine the effect of its inventory turnover ratio and days salesoutstanding (DSO) on its cash flow cycle. FMT sales last year (all on credit) were ₱150,000, and it earneda net profit of 6%, or ₱9,000. It turned over its inventory 5 times during the year, and its DSO was 36.5days. The firm had fixed assets totalling ₱35,000. FMT payables deferral period is 40 days.a. Calculate FMT’s cash conversion cycle.b. Assuming FMT holds negligible amounts of cash and marketable securities, calculate its totalassets turnover and ROA.c. Suppose FMT Corp managers believe that the inventory turnover can be raised to 7.3 times.What would FMT’s cash conversion cycle, total assets turnover, and ROA have been if theinventory turnover had been 7.3 for the year?
Serven Corporation has estimated its accrual-basis revenue and expenses for June 2017 and would like your help in estimating cash disbursements. Selected data from these estimated amounts are as follows: Sales: $700,000 Gross Profit (based on sales): 30% Increase in trade accounts recievable for the month: $20,000 Change in accounts payable during month: $0 Increase in inventory during month: $10,000 Variable selling, general, and administrative expenses include a charge for uncollectible accounts of 1% of sales. Total selling, general, and administrative expenses are $71,000 per month plus 15% of sales. Depreciation expense of $40,000 per month is included in fixed selling, general, and administrative expense. Required: On the basis of the preceding data, what are the estimated cash dispursements from operations for June?

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