Question

1. Your firm has a cash conversion cycle of 123 days; a sale to cash conversion...

1. Your firm has a cash conversion cycle of 123 days; a sale to cash conversion period of 67 days: and a purchase to payment conversion period of 54 days. Find the value of the inventory to sale conversion period of the firm. Must show all calculations of the formula

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Cash coversion cycle period = 123 days

sale to cash conversion period or Days sales outstanding =67 days

purchase to payment conversion period or Days payable outstanding = 54 days.

Cash coversion cycle period = sale to cash conversion period + purchase to payment conversion period +inventory to sale conversion period

123 = 67 + 54 + inventory to sale conversion period

inventory to sale conversion period = 123-67-54

=2

so Inventory to cash conversion period is 2 days

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Problem 16-11 Cash Conversion Cycle Negus Enterprises has an inventory conversion period of 62 days, an...
Problem 16-11 Cash Conversion Cycle Negus Enterprises has an inventory conversion period of 62 days, an average collection period of 35 days, and a payables deferral period of 36 days. Assume that cost of goods sold is 80% of sales. Assume 365 days in year for your calculations. What is the length of the firm's cash conversion cycle?   days If Negus's annual sales are $3,705,000 and all sales are on credit, what is the firm's investment in accounts receivable? Round...
Problem 21-11 Cash Conversion Cycle Negus Enterprises has an inventory conversion period of 59 days, an...
Problem 21-11 Cash Conversion Cycle Negus Enterprises has an inventory conversion period of 59 days, an average collection period of 47 days, and a payables deferral period of 31 days. Assume that cost of goods sold is 80% of sales. Assume 365 days in year for your calculations. What is the length of the firm's cash conversion cycle? days If Negus's annual sales are $3,651,525 and all sales are on credit, what is the firm's investment in accounts receivable? Round...
Cash Conversion Cycle Negus Enterprises has an inventory conversion period of 60 days, an average collection...
Cash Conversion Cycle Negus Enterprises has an inventory conversion period of 60 days, an average collection period of 48 days, and a payables deferral period of 27 days. Assume that cost of goods sold is 80% of sales. Assume a 365-day year. Do not round intermediate calculations. What is the length of the firm's cash conversion cycle? Round your answer to the nearest whole number. ___days If annual sales are $4,124,500 and all sales are on credit, what is the...
Problem 16-11 Cash Conversion Cycle Negus Enterprises has an inventory conversion period of 72 days, an...
Problem 16-11 Cash Conversion Cycle Negus Enterprises has an inventory conversion period of 72 days, an average collection period of 50 days, and a payables deferral period of 29 days. Assume that cost of goods sold is 80% of sales. Assume 365 days in year for your calculations. What is the length of the firm's cash conversion cycle? days If Negus's annual sales are $3,757,625 and all sales are on credit, what is the firm's investment in accounts receivable? Round...
Problem 16-11 Cash Conversion Cycle Negus Enterprises has an inventory conversion period of 80 days, an...
Problem 16-11 Cash Conversion Cycle Negus Enterprises has an inventory conversion period of 80 days, an average collection period of 47 days, and a payables deferral period of 33 days. Assume that cost of goods sold is 80% of sales. Assume 365 days in year for your calculations. What is the length of the firm's cash conversion cycle? days If Negus's annual sales are $3,693,025 and all sales are on credit, what is the firm's investment in accounts receivable? Round...
1) define Conversion Cycle, 2) solve the question below. Include how you solved the problem in...
1) define Conversion Cycle, 2) solve the question below. Include how you solved the problem in words, and then your detailed formula. The University has the following data. What is the University’s cash conversion cycle? Inventory conversion period = 50 days Receivables collection period = 17 days Payables deferral period = 25 days
Cash Conversion Cycle. Calculate the (a) accounts receivable period, (b) accounts payable period, (c) inventory period,...
Cash Conversion Cycle. Calculate the (a) accounts receivable period, (b) accounts payable period, (c) inventory period, and (d) cash conversion cycle for the following firm: Income Statement Data:             Sales                            5,000             Cost of goods sold      4,200             Balance sheet data: Beginning of Year End of Year Inventory 500 600 Accounts receivable 100 120 Accounts payable 250 290 Calculate the accounts receivable period: Response (show formula and numerical values): Calculate the accounts payable period Response (show formula and numerical values):...
DJ Inc.'s CFO would like to decrease its cash conversion cycle by 10 days (based on...
DJ Inc.'s CFO would like to decrease its cash conversion cycle by 10 days (based on a 365 day year). The company carries average inventory of $750,000. Its annual sales are $10 million, its cost of goods sold is 75% of annual sales, and its average collection period is twice as long as its inventory conversion period. The firm buys on terms of net 30 days, and it pays on time. The CFO believes he can reduce the average inventory...
(1) Use the information below to compute the number of days in the cash conversion cycle...
(1) Use the information below to compute the number of days in the cash conversion cycle for each company. (2) Which company is more effective at managing cash?    Spartan Co. Chen Co. Days' sales in accounts receivable 42 55 Days' sales inventory 25 29 Days' sales in accounts payable 32 37 Spartan Co. Chen Co. Cash to cash conversion cycle More Effective Cash Management    
Your firm currently has an operating cycle of 90 days. You are analyzing some operational changes...
Your firm currently has an operating cycle of 90 days. You are analyzing some operational changes which are expected to decrease the accounts receivable period by 4 days and decrease the inventory period by 5 days. The accounts payable turnover rate is expected to increase from 8 to 9 times per year. If all of these changes are adopted, what will be your firm's new cash cycle?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT