None You are provided the following working capital information for the Ridge Company:AccountInventory$$12,890Accounts receivable 12,800Accounts payable12,670Net sales$124,58999,630Cost of goods soldWhat is the cash conversion cycle for Ridge Company?a. 38.3 daysb. 129.9 daysc. 83.5 daysd. 46.4 days

Step 1: Computation of days in inventory outstandingDays inventory outstanding (DIO)= (Inventory /…

Answered: You are provided the following working…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 10P

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at Peacier DC-bit anac Help acte 11.po cnapte 10 e e cise. 72.8% O 57 64 (Cash conversion cycle) Sims Electric Corp. has been striving for the last five years to improve its management of working capital. Historical data for the firm's sales, accounts receivable, inventories, and accounts payable follow: JAN- 05 JAN- 06 JAN- 07 JAN- 08 JAN- 09 5296 7759 12327 Sales-Net 3475 2873 Receivable- Total 411 538 726 903 1486 Accounts Payable 283 447 466 1040 1643 Inventories 220 293 429 251 233 a. Calculate Sims' days of sales outstanding and days of sales in inventory for each of the five years. What has Sims accomplished in its attempts to better manage its investments in accounts receivable and inventory? b. Calculate Sims' cash conversion cycle for each of the five years. Evaluate Sims' overall management of its working eapital. O Type here to search 82% 27°C
FMT Trading Inc. has the following financial data: Annual sales 10,000,000Cost of goods sold 6,000,000Inventory 2,547,945Accounts receivable 1,643,836Accounts payable 1,200,000 a. What is the firm’s cash conversion cycle?b. Provide interpretations of the cash conversion cycle period of the firm.
Provided the following information: Sales =$1,440,000, Cost of Goods Sold= $1,100,000, Inventory=$200,000, Receivables=$160,000, Payables=S100,000 and there are 365 days in a year. What is the cash conversion cycle for the firm? a. 113.55 Days b. 77.05 Days c. 150.05 Days d. 73 Days e. None of the above
Direct Furnishings Inc. has the following data:Annual sales $10,000,000Cost of goods sold 6,000,000Inventory 2,547,945Accounts receivable 1,643,836Accounts payable 1,200,000What is the firm’s cash conversion cycle?
Wincon Inc. has originally planned for P10,000,000 sales for the coming year. The sales manager suggested to loosen the credit policy from n/10 to n/20. With this changes, the sales figure is expected to increase by 15%. Average collection period will increase from 8 days to 15 days. Bad debts will increase from 1% to 2.5% of sales. Wincon has a variable cost rate of 60% and an imputed cost of capital at 14%. What would the net benefit/(cost) of this change in credit policy?
Whaley & Whaley has the following data. What is the firm's cash conversion cycle? Inventory conversion period = Average collection period = Payables deferral period = O a. 37 days O b. 31 days O c. 41 days Od: 45 days O e. 34 days 41 days 31 days 38 days
REQUIRED Calculate the working capital cycle of Provalis Limited. INFORMATION The following financial information is provided by Provalis Limited R Sales (all credit) 8 000 000 Cost of Sales 5 600 000 Purchases (60% on credit) 7 000 000 Accounts Receivable 1 800 000 Accounts Payable 1 200 000 Inventory 900 000
What is the cash conversion cycle for ABC corporation using the following information: sales: 10,000,000 cost of goods:7, 500,000 accounts receivable: 1, 232, 877 inventory turnover ratio: 10 payable deferred period:40

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