FINANCIAL ACCT.FUND.(LOOSELEAF)
FINANCIAL ACCT.FUND.(LOOSELEAF)
7th Edition
ISBN: 9781260482867
Author: Wild
Publisher: MCG
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Chapter 13, Problem 14QS
To determine

Introduction: The liquidity ratios of the business are computed to know the short-term liquidity position of the business to know the capacity of paying the short-term liabilities. The same is computed and determined through the Current ratio and Acid-Test ratio.

The solvency ratios suggest the long-term solvency position of the business taking into consideration the capital structure in which the finances have been employed. The same is determined through the debt-equity ratio and times interest earned.

The profitability ratios suggest the earning capacity of the business in terms of profit margin based on sales revenue and return on total assets based on total assets of the business.

:

Report on the operating efficiency and liquidity of the business.

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Your boss at LK Enterprises asks you to compute the company's cash conversion cycle. Looking at the financial statements, you see that the average inventory for the year was $135,500, accounts receivable were $102,400, and accounts payable were at $121,700. You also see that the company had sales of $356,000 and that cost of goods sold was $298,500. What is your firm's cash conversion cycle? Round to the nearest day.
Azure Manufacturing 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 72 days, pays its suppliers 42 days after purchase, and collects its receivables after 60 days. The firm's annual sales (all on credit) are about R2.5 billion, its cost of goods sold represents about 70 percent of sales, and purchases represent about 45 percent of the cost of goods sold. Assume a 365-day year. What is Azure Manufacturing's cash conversion cycle (CCC)? Tutor help me
Not average for the year?

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FINANCIAL ACCT.FUND.(LOOSELEAF)

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