Given answer general Accounting XYZ Manufacturing has the following operational data:•Inventory holding period: 35 days•Customer collection period: 25 daysSupplier payment period: 20 daysCalculate:1. XYZ's business operating cycle2. XYZ's cash conversion cycle3. If XYZ wants to reduce its cash conversion cycle by 15 days, whatoptions does it have?

1. Business Operating Cycle:Formula: Inventory Holding Period + Customer Collection…

Answered: XYZ Manufacturing has the following…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter16: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P

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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. What is the length of the firm’s cash conversion cycle? If annual sales are $4,380,000 and all sales are on credit, what is the firm’s investment in accounts receivable? How many times per year does Negus Enterprises turn over its inventory?
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General Accounting
What is the length of the firm's cash conversion cycle?
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Suppose the company has just the opposite news and now expects unit sales for August, September, and October to be double (200%) the original estimates. What effect will this have on the company’s net income and borrowing? Explain your findings.
a. Assume that the cost of goods sold is 60% and that the monthly discount rate is 1%. Looking at the values in the exhibit above, you note that the average monthly revenue for a subscribed customer rises as the company sends more emails. In addition, the average monthly revenue for an unsubscribed customer also rises as the company sends more emails. What could explain both of these patterns? b. Calculate the 6-month LTV for each of the four tested email frequencies. Please show the spreadsheet with your calculations and be clear about any assumptions you are making. c. Based on this test, how many emails-per-week should the company be sending to its customers? This email frequency should apply to all customers; the company doesn't want to implement a different email frequency for different kinds of people
Suppose that LilyMac Photography has annual sales of $230,000, cost of goods sold of $165,000, average inventories of $4,500, and average accounts receivable of $25,000. Assume that all of LilyMac's sales are on credit. What will be the firm's operating cycle? (Use 365 days a year. Do not round intermediate calculations. Round your final answer to 2 decimal places.)
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1. Fires Inc. has a cash conversion cycle of 3 weeks. It has a receivable turnover of 45 and disburse payments to suppliers after 1 week. Determine the normal operating cycle of Fires Inc. if the 360-day year is used. 2. Airbmac Inc. has a total asset and total sales of P1,500,000 and P4,500,000, respectively. If the net income of the firm is only 4% of the sales revenue, what is the return on assets?

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