Your consulting firm was recently hired to improve the performance of ABC Inc, which is highly profitable but has been experiencing cash shortages due to its high growth rate. As one part of your analysis, you want to analyze the firm's cash cycle. Using the following information and a 365-day year, what is the firm’s operating cycle? Average inventory = $75,000 Annual sales = $875,000 Annual cost of goods sold = $525,000 Average accounts receivable = $160,000 Average accounts payable = $25,000
Your consulting firm was recently hired to improve the performance of ABC Inc, which is highly profitable but has been experiencing cash shortages due to its high growth rate. As one part of your analysis, you want to analyze the firm's cash cycle. Using the following information and a 365-day year, what is the firm’s operating cycle? Average inventory = $75,000 Annual sales = $875,000 Annual cost of goods sold = $525,000 Average accounts receivable = $160,000 Average accounts payable = $25,000
Chapter16: Supply Chains And Working Capital Management
Section: Chapter Questions
Problem 11P
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Your consulting firm was recently hired to improve the performance of ABC Inc, which is highly profitable but has been experiencing cash shortages due to its high growth rate. As one part of your analysis, you want to analyze the firm's cash cycle. Using the following information and a 365-day year, what is the firm’s operating cycle?
Average inventory = |
$75,000
|
Annual sales = |
$875,000
|
Annual cost of goods sold = |
$525,000
|
Average accounts receivable = |
$160,000
|
Average accounts payable = |
$25,000
|
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