Accounting question Wolfgang's Masonry management estimates that it takesthe company 27 days on average to pay off its suppliers.It also knows that the company has days' sales ininventory of 64 days and days' sales outstanding of 32days. How does Wolfgang's cash conversion cyclecompare with the industry average of 75 days?

Step 1:Define Cash Conversion CycleThe cash conversion cycle is a part of the working capital…

Answered: Wolfgang's Masonry management estimates…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 2P

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Similar questions

Watts Industries' carries 87 days in Inventory, and collects its Accounts Receivable in 75 days. If the firm pays its Accounts Payable in 26 days, what is Watts' Cash Conversion Cycle?
Sam & Sons management estimates that it takes the company 34 days on average to pay its suppliers. Management also knows that the company has days’ sales in inventory of 57 days and days’ sales outstanding of 35 days. How does Sam & Sons' cash conversion cycle compare with the industry average of 69 days? Sam & Sons' cash conversion cycle is_____ days Cash conversion cycle is (?) the industry average. The firm is (?) than other firms in the industry in managing its working capital.
Aztec Products wishes to evaluate its cash conversion cycle (CCC). Research by one of the firm’s financial analysts indicates that on average the firm holds items in inventory for 65 days, pays its suppliers 35 days after purchase, and collects its receivables after 55 days. The firm’s annual sales (all on credit) are about R2.1 billion, its cost of goods sold represent about 67 percent of sales, and purchases represent about 40 percent of cost of goods sold. Assume a 365-day year. What is Aztec Products’ cash conversion (CCC)? If Aztec could shorten its CCC by 5 days, would it be best to reduce the inventory holding period, reduce the receivable collection period, or extend the accounts payable period? Why? How should the firm manage its inventory, accounts receivable, and accounts payable in order to reduce the length of its cash conversion cycle?
BSW & Company has the following data. What is the firm's cash conversion cycle? Inventory conversion period = 75 days Average collection period = 32 days Payables deferral period = 55 days 43 days 62 days 23 days 20 days 52 days
Begusarai enterprises has...Accounting question
Cass & Company has the following data. What is the firm's cash conversion cycle? Inventory Conversion Period = 40 days Receivables Collection Period = 17 days Payables Deferral Period = 25 days Question options: 35 days 31 days 25 days 32 days 33 days
General Accounting
Berry Manufacturing turns over its inventory 8 times each year, has an Average Payment Period of 35 days and has an Average Collection Period of 60 days. The firm’s annual sales are $3.5 million. Assume there is no difference in the investment per dollar of sales in inventory, receivable, and payables and that there is a 365-day year. A. Calculate the Firm’s Operating Cycle. B. Calculate the Firm’s Cash Conversion Cycle. C. Calculate the Firm’s Daily Cash Operating Expenditure.
Skylark Industries has P6,000,000 in inventory and P3,000,000 in accounts receivable. The company has an average daily sales of P100,000. The company’s payables deferral period is 30 days. Compute for the cash conversion cycle. * A.100 days B. 60 days C. 50 days D. 40 days E. 33 days
Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35 days, and payables deferral period of 25 days. Assume that the costs of goods sold are 80% of its sales. a) What is the length of the firm's cash conversion cycle? b) If Negus's annual sales are $4,380,000 and all sales are on credit, what is the firm's investment in accounts receivable? c) How many times per year does Negus Enterprises turn over its inventory?
A CARDBOARD BOX FACTORY pays its suppliers 40 days after making the purchase and receiving the goods. The average collection period is 45 days, i.e. its customers settle their debt with the company in that time; and the average inventory age is based on the inventory turnover which is 10 times a year. The company spends about $1.23 million in operating cycle investments. With this data we need to calculate: The operating cycle.The cash conversion cycle.The cash turnover.The minimum cash balance.You plan to make modifications to your policies so that you can decrease your PPC by 10 days, and decrease your EPI by 2 times (before converting it to days). Negotiations with your supplier have been unsuccessful and the payment term has been reduced by 10 days. With these data you have to calculate: Re-calculate the Operating Cycle, the SCC, RC and SMC introducing the proposed changes.Calculate the opportunity cost that the changes will cause, if the company's interest rate is 8%.
(16-11) Cash Conversion Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35 days, and a payables deferral period of 25 days. Assume that cost of goods sold is 80% of sales. Cycle a. What is the length of the firm's cash conversion cycle? b. If annual sales are $4,380,000 and all sales are on credit, what is the firm's investment in accounts receivable? C. How many times per year does Negus Enterprises turn over its inventory?

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